Bond prices are stretched as investors seem to have become less concerned about their safety. The picture in the UK bond market has an added nuance. Equity prices for UK-focussed companies have underperformed international equity markets as investors have factored in perceived lower, and downside risks to, future growth. 7  And yet, sterling corporate bond markets are stretched like other bond markets. 8  To get a better read on how stretched, we need to account for the lengthening over time in the average duration of sterling corporate bonds and the fall in the average credit rating (which other things equal should raise risk premia). When we do that, we see that the joint compensation investors are demanding for interest rate and credit risk is… …zero. There is an inconsistency. If investors are confident in risk-free rates remaining low because they see downside risks to the economy, it seems odd that that they should at the same time be demanding less, rather than more, compensation for credit risk. There’s more than a flavour of interest rate cake having and credit risk cake eating. The picture in parts of the UK commercial property market is similar. At the UK-wide level, commercial property prices rest on persistently low interest rates but at the same time, they’re factoring in typical rental growth prospects and degree of uncertainty around them. 7  UK government bond yields have also fallen relative to other sovereigns.
This has included enhancing access to the unserved sectors as well as the introduction of highly innovative delivery channels such as retail outlets and post offices as third-party agents to widen the outreach of financial services. These have worked in tandem to ensure that all members of society, including the most vulnerable groups, have the opportunity to participate in the formal financial system. Concurrently, continuous efforts are being undertaken to promote consumer protection and education, in  2  BIS central bankers’ speeches  order to ensure fair and responsible market practices and conduct, and that consumers are better equipped with the necessary financial knowledge to make informed decisions. Recognising that the development of the financial sector also depends on the availability of high quality and skilled talent, focus was accorded to the development of human capital through the introduction of institutional arrangements to provide comprehensive education and learning programmes for the financial services industry. Towards this objective, the Central Bank oversaw the establishment of differentiated platforms to meet the diverse needs of financial services professionals, from the entry to middle management, specialist and leadership levels. These include the setting up of programmes and institutions such as the Financial Sector Talent Enrichment Programme, the ICLIF Leadership and Governance Centre and INCEIF, the global university of Islamic finance.