For example as we move closer to ending too big to fail, and with standardised compensation schemes for retail depositors, one could reasonably ask why we need the same degree of regulation at all? Has the cost of providing credit to the economy been increased? Will the reforms restrict competition and innovation? Have capital markets been rendered dysfunctional? It is possible that there are degrees to which all these questions might have positive answers. But against that, the consequences of the Great Financial Crisis were so large, so negative for millions of people around the globe in terms of unemployment and reduced incomes, that more regulation, in every direction has been a necessary response. Over time one may learn where the reforms can be eased, where they  12  Bank of England/FCA/HMT, June 2015. “Fair and Effective Markets Review”. BIS central bankers’ speeches  11  need to be tightened, or whether other policies need to be introduced to offset any unwanted side effects. Let me re-state what has been said before – the authorities generally, including regulators, do not want the stability of the graveyard. We want successful, profitable, privately owned firms operating in the best interests of the global economy to support sustainable growth. The regulation of the financial services sector has to be aligned with that. But just as we don’t want growth generated by firms causing excess pollution, nor do we want it sustained by financial firms that take excessive risks with other people’s money.
This has weighed heavily on resident population growth as seen from the relatively close correlation with the TFR. There appears to be three distinct phases in the last 30 years: In the 1990s, both the TFR and resident population growth declined in tandem. In the 2000s, the TFR continued to decline but resident population growth recovered. This reflected net positive immigration as the number of new citizens and Permanent Residents grew. In this decade, the TFR appears to have stabilised at around 1.2–1.3 while resident population growth fell sharply reflecting the tightening of immigration flows. 2 / 17  BIS central bankers' speeches  The next two slides are a thought experiment. They are not a forecast or prediction but aim to illustrate the implications of having very low resident population growth. First, let us assume that we have zero net immigration starting from this year. The resident working-age population – this is defined as citizens and permanent residents between the ages of 15–64 – will begin to shrink from around 2020. The exact year is not key. What is important to note is that it is not far off. By 2035, the working-age resident population will possibly decline by a cumulative 3.5%. 3 / 17  BIS central bankers' speeches  Second, let us assume zero net increase in foreign workers from now on. The overall labour force will decline gradually from around 2022, driven fundamentally by the shrinking resident labour force. These two assumptions taken together – zero net migration (i.e.