their established line of credit at a canadian bank to be paid back in full at a fixed date in the future. now, bas make up the largest portion of money market instruments issued by non - government entities, accounting for around 25 per cent of the total money market. in 2017, an average of about $ 76 billion in bas was outstanding. a paper we published today on our website reviews the evolution of the ba market. since 2014, and in keeping with the iosco principles, cdor has been strengthened in a number of ways. thomson reuters has been appointed the administrator and is responsible for the calculation and distribution of the rate. thomson reuters has also formed an oversight committee for cdor to regularly review its definition, scope and methodology. and the office of the superintendent of financial institutions is now supervising the governance and risk controls surrounding the submission processes at the panel banks. although cdor does not have the same vulnerabilities as libor, it is being used in derivatives markets where the notional value of contracts is a multiple of volumes in the underlying ba markets and where a risk - free rate may better suit the needs of many users. fortunately, we already have a risk - free overnight rate. let me introduce you to corra, the canadian overnight repo rate average, which has been in place since 1997. it measures the average cost of overnight collateralized funding and is an important reference rate for overnight index swaps, which investors use if they want, for example, to hedge interest rate risk related to bank of canada rate decisions. corra is based on actual transactions and is calculated from on - screen trades through interdealer brokers. as with cdor, corra is now administered by thomson reuters. so, in canada, we have a different starting point and have made further enhancements to comply with the iosco principles. canadian alternative should we be satisfied that this is enough? we don ’ t know the answer to this question yet, but to help work through the issues we recently set up the canadian alternative reference rate working group ( carr ). 3 we know a risk - free rate is a better fit for most derivative - related exposures. recall the example i mentioned earlier of issuers who want to hedge their interest - rate liabilities from a fixed to a floating rate. if other currencies move primarily to using risk - free rates as their benchmark, specifically term risk - free rates, market participants may want to have the same option in

of them. such benchmarks would be a better fit for many derivatives transactions. market participants, together with central banks and other authorities, have been actively pursuing this “ twin track ” approach of strengthening existing benchmarks and developing alternatives. a risk - free rate would help accomplish two goals. first, it would reduce the dependence on any individual benchmark. second, it would allow counterparties to select benchmarks that might more closely match the exposures they want, enabling them to better meet the needs of some derivatives markets. for example, libor is meant to represent a bank ’ s cost of funding. it can vary according to a number of factors, such as an increase in underlying rates or a deterioration in the creditworthiness of banks — as we saw during the global financial crisis. imagine a sovereign issuer wanting to take a fixed - rate bond and swap it to a floating - rate liability. since such an issuer ’ s creditworthiness does not fluctuate with that of the banking system, using a benchmark with a shortterm rate that is not influenced by the creditworthiness of banks would be more appropriate. some of the alternatives that have been identified are new, while others are existing rates that are being, or have been, enhanced. in all cases, they are overnight rates. now, many jurisdictions are exploring whether they need to develop term risk - free benchmarks, say for one - or three - month maturities, for use in mortgages and cash markets and perhaps also for some derivatives. this might help the transition from libor - type benchmarks, where term rates are more widely used than overnight rates. for this to happen, such benchmarks would have to be consistent with the iosco standards. the pace of all this work accelerated last summer thanks to andrew bailey, chief executive of the united kingdom ’ s financial conduct authority ( fca ), which regulates libor. he announced that libor might be sustainable only until the end of 2021. after that date, the fca will not persuade or compel banks to submit libor rates. this means markets need to be ready to transition to alternative benchmarks. this announcement came as a surprise to those who had not been closely following benchmark developments. now, roughly a year later, there appears to be wider market acceptance of what needs to be done, and progress is continuing despite the significant complexities. 2 progress in the united states i ’ ll focus on recent developments in the united