In China, the constancy in high household saving rates masks two striking, but broadly offsetting, factors: a 10 percentage point fall in household’s income share; and a 10 percentage point rise in household’s saving propensity (Ma and Yi (2010)). Much of the rise in saving propensities appears to be precautionary. Facing “three mountains” in the future – education, pensions and health care – Chinese consumers have taken the high (saving) road. In the US, the fall in the household financial balance correlates strongly with the path of household net worth (McKelvey (2010), Chart 13). This correlation emerged strongly during the 1980s, with the simultaneous rise in net wealth and fall in saving. This correlation has remained strong as net worth has reversed recently due to falling house and equity prices. What lies behind these movements? Lax monetary policy has been suggested by some (Taylor (2007)). Financial liberalisation is a second plausible candidate. This had the effect of loosening constraints on the supply of housing credit and thereby boosting housing demand and prices in the US. It also enabled households to mobilise and withdraw the accrued equity in their property to finance spending. Estimates of housing equity withdrawal for spending rose from under 2% of personal disposable income in 2000 to around 4% at the peak in 2005 (Greenspan and Kennedy (2007), Chart 14). Micro-level data support this story.
In conclusion, I would like to reaffirm the importance of continued training and development of human resources working in this field to insure that they have necessary skills and to keep them acquainted with developments. Thank you for your attention and I welcome you all once again, wishing you a successful gathering. 2  BIS central bankers’ speeches