The output gap remains negative, so that there is no pressure on wages and prices in the foreseeable future. The outlook is favourable, since we expect that the gradual recovery of the economy in Europe will stimulate demand for Swiss exports. We anticipate growth of 1.5–2.0% for the current year. Dangers of a prolonged low-interest period What do these tentative global economic developments mean for monetary policy? Most central banks maintained their very expansionary course and the various unconventional measures. These measures were largely uncontested as long as they served to stabilise financial markets and the banks and subsequently to stimulate the economy. However, the longer the current low interest rate period continues, the greater the associated risks can be. I would now like to talk about two of these risks – the increasing price distortions in various investment categories and the decreasing motivation to undertake structural reform measures. Increasing price distortions: The very low interest rates affect aggregate demand in the economy both directly and also via the wealth effect. One of the effects which expansionary monetary policy abroad encourages is the quest for yield and, with it, the transfer of assets into more risky investments. However, low interest rates can result in misallocation on financial markets, particularly when they persist for a long period of time. It is possible that  4  BIS central bankers’ speeches  risks may be misjudged and, as a result, relative prices distorted.
It is estimated that more than a quarter of assets under management globally are now invested using the Environment, Social, and Governance or ESG principles5. Ladies and gentlemen, It is now up to all of us—financial institutions, policymakers, and leaders—to embrace sustainability and incorporate its guiding principles in our daily lives and business practices. The objective of the Bangkok Sustainable Banking Forum is to raise awareness of the various issues of sustainability and identify gaps within our financial sector. Seeing much enthusiasm from our high-level participants this morning, I am certain we can make positive changes for our future generations. I would like to take this opportunity to thank all of you for taking the time out of your busy schedules to be here with us. I would also like to thank the speakers, some of whom have traveled from different parts of the globe, for being here to share to with us their insights and best practices. Let me, once again, urge all of us to think wisely, maintain longterm focus, and take responsible actions now so that in the next decade we would not be standing here asking ourselves again how we have allowed these challenges to get out of hand. Ladies and gentlemen, The Bank of Thailand looks forward to collaborating with all of you on our sustainability journey. Thank you very much for your participation. 5  Bernow, Sara, Klempner, Bryce, Magnin, Clarisse. “From ‘why’ to ‘why not’: Sustainable investing as the new normal.” McKinsey and Company, October 2017. 6/6