Good afternoon, ladies and gentlemen.
Since the beginning of the financial crisis almost six years ago, central banks and fiscal authorities have supported the global economy with unprecedented measures. Policy rates have been kept near zero in the largest advanced economies. Central bank balance sheets have doubled from $10 trillion to more than $20 trillion. And fiscal authorities almost everywhere have been piling up debt, which has risen by $23 trillion since 2007. In emerging market economies, public debt has grown more slowly than GDP; but in advanced economies, it has grown much faster, so that it now exceeds one year's GDP.
Without these forceful and determined policy responses, the global financial system could easily have collapsed, bringing the world economy down with it. But the subsequent global recovery has remained halting, fragile and uneven. In the United States, the expansion continues, albeit at a moderate pace. In major emerging market economies, growth is losing momentum. Most of Europe has fallen back into recession. At the same time, the general downward trend in productivity growth has not been receiving enough attention from policymakers.
As the risks mounted around mid-2012, central banks rode to the rescue yet again. The ECB addressed market fears with the promise that it would do "whatever it takes" within its mandate to save the euro. It followed up with a conditional programme to buy sovereign debt of troubled euro area countries. The Federal Reserve, the Bank of England and the Bank of Japan likewise pushed forward with additional expansionary measures.
And while large advanced economies were expanding their unconventional policies, central banks in many emerging market economies lowered their target policy rates, in some cases reducing them to their 2009 levels.