Meanwhile, AIG Financial Products compensated its employees, including risk officers, on the basis of revenues brought in rather than profits. At Lloyds, incentive schemes which pressured sales staff to meet targets or face demotion also encouraged misselling of payment protection insurance. In all these instances, executives were inclined to focus on immediate outcomes such as revenues and sales targets in order to deliver visible results quickly, without much regard for the risks assumed. Major efforts have since been undertaken internationally to address these issues. The essence of these reforms is twopronged: the first is a greater emphasis on the governance of the compensation framework by the board and senior management; the second is a greater alignment of compensation practices with prudent risk-taking. As risks undertaken today may materialise much later in the future, the latter entails deferring portions of compensation and subjecting them to adjustments, such as bonus-malus and clawbacks. Finally, a strengthened role of market discipline can also shape the governance of finance for the better by reducing information asymmetries between the market and financial institutions. Again, regulations can play a part by enhancing the scope and quality of mandatory disclosures, such as in respect of key information relating to risk exposures, risk management policies and capital ratios. A relevant emerging trend among investors and consumers has been an increasing focus on more sustainable approaches to finance, including those which consider environmental, social and governance concerns.
The baseline scenario has been revised upwards from $ to $ a barrel; the high oil price scenario has been revised downwards from $ to $ Our oil price forecast for 2020–2021 remains unchanged. These adjustments have made no major impact on expected economic growth indicators in the context of the operating fiscal rule. Finalised data suggest GDP growth was 2.3% last year, above our expectations. Our estimates suggest that the accomplishment of major investment projects emerged as key enablers of this growth. With due regard for this, we, first, reconfirm our assessment of the nature of economic growth: the economy is close to its potential; its expansion does not create additional proinflationary pressure. Second, we keep our GDP growth estimate in the baseline scenario at 1.2-1.7% for this year. The growth rates will accelerate to 1.8-2.3% in 2020 and 2-3% in 2021 as the positive effect of national projects and structural reforms provided that these deliver. The oil price adjustments in the forecast carry implications for balance of payments indicators. In the baseline scenario, the forecast current account balance for this year has been upgraded from $ billion to $ billion, chiefly on the back of a higher value of oil and gas exports. The balance of the financial account of the private sector has also been raised from with $ billion to $ billion. This is based on the actual data for the first two months of the year along with greater opportunities for the buildup of foreign assets given the higher export revenues.