Recent developments indicate that market participants have either not been aware of existing best practices guidance or have made the conscious decision to violate such guidance in the hopes of making a short-term gain. The cost of these short-term gains has come at all of our expense and we must all be engaged to ensure that this does not happen again. Moving toward more globally harmonized guidance – and consistent adherence to such guidance – is an important step forward in maintaining the integrity of the market. In recognition of the importance of this work, a new working group of the BIS Markets Committee has been formed to facilitate the establishment of a single global code of conduct and principles and to promote greater adherence to such guidance. 14 This newly formed  13  See http://www.ny.frb.org/fxc/2015/Global%20Preamble%20March30.pdf. 14  See: http://www.bis.org/press/p150511.htm. BIS central bankers’ speeches  7  structure will deepen and broaden the already initiated public-private partnership and will engage an even wider set of financial centers in order to effectively move this work on best practices forward. The work will occur on a global scale and will engage a wide variety of market infrastructures and participants, including both the buy side and sell side. It will likely draw upon a variety of efforts, including the important work done in the U.K. under the Fair and Effective Markets Review. The FXC will be actively engaged in this effort along with its counterparts abroad, at the direction of the BIS Markets Committee FX Working Group.

And third, the expansion of that work into the current international effort to develop and implement a single global code of conduct for the foreign exchange market and to enhance adherence to that code among all market participants. Work of the Financial Stability Board’s Foreign Exchange Benchmarks Group (FXBG) Given the global nature of the FX market, as well as the number of jurisdictions in which wrongdoing has been uncovered, efforts to strengthen the market must be global in nature as well. Recognizing this imperative, the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, established the Foreign Exchange Benchmarks Group (FXBG) in early 2014. The purpose of the FXBG was to review FX benchmarks and associated market practices, including potential misaligned incentives, and make recommendations for change. The FXBG, which consisted of representatives from more than twenty countries, engaged with a range of market participants to analyze the market structures and incentives as they related to trading around benchmark fixings. The group produced a series of recommendations to enhance the structures and behaviors around FX benchmark trading. I would like to focus on two particular aspects of these recommendations – first, changes to the WM/Reuters calculation 10 and second, changes aimed at strengthening market conduct. The FXBG report highlighted the dominant use of the WM/Reuters (WMR) 4 p.m. London fixings by many different sets of market participants, including some not otherwise active in the foreign exchange market.