It turns out, unfortunately, that the financial and fiscal problems associated with longevity may be a lot bigger than we thought. The good news is that if we act now, we can find solutions that limit hardship and disruption.
The global financial system remains fragile. It is urgent to restore confidence in the euro area and beyond. Otherwise we run the risk of a deepening of the crisis, with far-reaching global economic and social consequences.
Several shocks have recently buffeted the global financial system: unequivocal signs of a broader global economic slowdown; fresh market turbulence in the euro area; and the credit downgrade of the United States.
What drives the investment decisions of investors with a longer time horizon? Our research found these investors generally do not look at differences in interest rates among countries when deciding where to invest.
Europe's sovereign debt crisis, fiscal challenges in advanced economies, concerns about overheating in emerging market countries, and the impact of rising food prices. These were the hot topics this year in Davos.
In emerging markets, policymakers must act now to avoid future crises. It is important to maintain the appropriate mix of macroeconomic and prudential financial policies to deal with the challenges posed by capital inflows.