One reason why we look ahead in this way is that monetary policy’s effects are exerted with a time lag. But the two-year horizon is also motivated by considerations to developments in the real economy. This creates some scope for trade offs in the inflation-targeting policy. Let me explain. If we were only concerned with inflation, we would always want to bring inflation back on target as quickly as possible. On many occasions it would be possible to attain the target sooner than within two years. But we would then need to change the interest rate in larger stages and more often. This type of policy would risk leading to unwanted fluctuations in the real economy. This applies in particular to the situations where inflation has deviated from target as a result of supply shocks. These could be, for instance, sudden increases in companies’ production costs due to soaring commodity prices and/or energy prices. The result could then be that inflation would rise above the target, while economic activity would be weak. The reverse can also occur - a fall in production costs could lead to inflation being lower than the target, while capacity utilisation was higher than is sustainable in the long term. If monetary policy were to aim at bringing inflation back on target as quickly as possible in these situations, it would further reinforce the fluctuations in the real economy.
In a few months’ time, the Bank will be issuing an Exposure Draft on Fair Treatment of Financial Consumers which will set out heightened regulatory expectations for all players. Agents will need to exercise greater care, skill and diligence in their dealing with customers. But rules and regulations are in themselves not sufficient to create a pool of agents trusted by customers: That would require all-round, holistic professionalism – an agent who is technically qualified, fully committed and uncompromising on ethical standards. To me, it is this integrity and calibre that will ultimately guarantee the continued success of agents into the next decade, more so than any other factor. Faced with a more demanding and complex business environment, agents must continuously develop and equip themselves with skills and knowledge that are relevant, and that will continue to remain relevant well into the future. There are plenty of formal programmes available to help agents progress in their technical competencies. There is also a whole host of open online courses which can be accessed anytime, anywhere, with the desire to learn is the only prerequisite. It is encouraging that various professional training courses are already being offered through NAMLIFA’s Financial and Life Practitioners Council, and that one of the programmes has been accredited by the Financial Accreditation Agency (FAA).