and our efforts to understand and influence it have, at best, only kept pace. complex links among financial market participants and institutions are a hallmark of the modern global financial system. across geographic and market boundaries, agents within the financial system engage in a diverse array of transactions and relationships that connect them to other participants. indeed, much of the financial innovation that preceded the most recent financial crisis increased both the number and types of connections that linked borrowers and lenders in the economy. the rapid growth in securitization and derivatives markets prior to the crisis provides a stark example of this phenomenon. as shown in the views expressed here are my own and not necessarily those of my colleagues in the federal reserve system. i am indebted to members of the board staff – celso brunetti, cecilia caglio, sean campbell, erik heitfield, and john maggs – who contributed to the preparation of these remarks. the level of the dow jones industrial average dropped 43. 8 percent between november 15, 1906 ( 94. 25 ), and november 15, 1907 ( 53. 00 ). see dow jones & company ( 2012 ). see federal reserve act, ch. 6, 38 stat. 251 ( 1913 ). bis central bankers ’ speeches figure 1, between 2000 and 2007, the notional value of collateralized debt obligations outstanding increased from less than $ 300 billion to more than $ 1. 4 trillion. 4 from 2004, the earliest date for which comprehensive data are available, to 2007, the outstanding notional amount of credit default swap ( cds ) contracts increased tenfold, from $ 6 trillion to $ 60 trillion. 5 this incredible growth in securitization and derivatives markets reflects a significant increase in the number, types, and complexity of network connections in the financial system. financial economists have long stressed the benefits of interactions among financial intermediaries, and there is little doubt that some degree of interconnectedness is vital to the functioning of our financial system. economists take a well - reasoned and dim view of autarky as the path to growth and stability. banks and other financial intermediaries channel capital from savers, who often have short - term liquidity demands, into productive investments that typically require stable, long - term funding. financial intermediaries work with one another because no single institution can hope to access the full range of available capital and investment opportunities in our complex economy. connections among market actors also facilitate risk sharing, which can help minimize ( though

the guide is simple enough for everyone to understand. it is featured in, samoan, tongan and english and with this in mind, samoa has accepted the privilege to be the imperative starting point for launching this project. this guide was by you and for you. it was compiled using your perspective as a school student, as an elder of the village, as a hard working stay at home mother and as a danceloving - father when he gets his paycheck without his wife knowing ; or to put simply, as an everyday samoan citizen. moneypacific has produced the guide and made it easy to understand, and made it accessible to everyone so that you can plan, measure, prioritise or just to be aware of how bis central bankers ’ speeches much you are spending for everyday necessities. again the intension is not to dictate how much your wallet is crying but to ensure that your wallet is happy to deliver a well sought out purpose for you and your families. to round up my remarks, i would like to take this opportunity to thank the new zealand and australian governments for the support afforded to the moneypacific iniative as we have benefitted greatly from the work it carries out for the pacific communities. i would like to thank each and every one of you for making the time to attend today ’ s moneypacific money guide launch. but before i hand you over to the moneypacific team for their presentation i truly believe your goals and objectives in your respective designations can be greatly complemented with our agenda of financial literacy and that this latest resource will be of use to the pursuit of youth and women empowerment, assist the micro - entreprenuers, complement student learnings from the existing national education curricula, and overall greatly assist us in all our diverse capacities as financial consumers. manuia le tatou fa ’ amoemoe. thank you. bis central bankers ’ speeches