Its key objective will be to pursue a broad-based transition from Libor to SONIA by 2021. Buy side firms, issuers, infrastructure firms and trade associations will be brought into the Group alongside banks and broker-dealers. We are under no illusions about the complexity of the task. Libor is embedded throughout the financial system in derivatives, loans, bonds and commercial contracts. 13  The Bank and FCA are committed to supporting UK market participants as they prepare for the transition. Reasserting London’s Leadership of Real Markets  To conclude, two years on from FEMR, by working together, we are making enormous progress. We are moving from markets that collapse when there is a shock from abroad to markets that are resilient. From markets where transactions occur in chat rooms to markets that are professional and open. From markets where few were accountable for anything to markets where everyone is responsible for their actions. The FMSB is playing an essential role in this transformation. When your standards are combined with more robust regulatory requirements, new compensation arrangements and the Senior Managers Regime, we are achieving what Canute could not. The tide of misconduct is going out, revealing the real markets working for the good of the people of the United Kingdom and the world. 12  To facilitate a smooth transition, the FCA has coordinated panel banks to support Libor until the end of 2021. See the Record of the September FPC meeting at http://www.bankofengland.co.uk/publications/Pages/Records/fpc/2017/record1710.aspx 13  9  All speeches are available online at www.bankofengland.co.uk/speeches  9

These reforms, in turn, would contribute to progress in fiscal consolidation, as they would enhance the perception of the sustainability of public finances and would reduce the degree of sacrifice implicit in the necessary fiscal austerity that must be maintained in the coming years. There are several fields in which the Spanish economy requires an overhaul of its structures, to make them more consistent with our membership of a monetary area and with a highly competitive and globalised world economy. Two such fields are the labour market and the financial system, on which I shall elaborate in detail later on in my address. Correcting the inefficiencies weighing down on the functioning of our labour market is of paramount importance since, as the market is currently structured, the obstacles to gaining competitiveness and generating sustainable employment are patently clear. In particular, these shortcomings have meant that the adjustment of the economy in the recent crisis has fallen disproportionately on employment as a result, among other reasons, of the scant sensitivity of collective bargaining to the specific situation of firms. The extent of these rigidities is not merely cyclical; their effects are largely permanent as they force firms and workers out of the market, causing lasting damage to productive capacity and human capital. Last week the government approved a series of measures aimed at correcting these inefficiencies, specifically at reducing duality in hiring and at reinforcing companies’ internal flexibility.