at the same time, because i appreciate the role of chance and contingency in human events, i try to be appropriately realistic about my own capabilities. i know there is much that i don't know. i consequently try to be attentive to all points of view, to work collaboratively, and to involve as many smart people in policy decisions as possible. fortunately, my colleagues and the staff at the federal reserve are outstanding. and indeed, many of them have demonstrated their own breadth and flexibility, moving well beyond their previous training and experience to tackle a wide range of novel and daunting issues, usually with great success. law is like economics in that, although it has its own esoterica known only to initiates, it is at bottom a craft whose value lies primarily in its practical application. you cannot know today what problems or challenges you will face in the course of your professional lives. thus, i hope that, even as you continue to acquire expertise in specific and sometimes narrow aspects of the law, you will continue to maintain a broad perspective and willingness, indeed an eagerness, to expand the range of your knowledge and experience. i have spoken a bit about the economic and financial challenges that we face. how do these challenges bear on the prospects of the graduates of 2009? the economic situation is a trying one, as you know. we are in a recession, and the labor market is weak. many of you may not have gotten the job you wanted ; some may have had offers rescinded or the start of employment delayed. i do not minimize those constraints and disappointments in any way. restoring economic prosperity and maximizing economic opportunity are the central focus of our efforts at the fed. nevertheless, you are in some ways very lucky. you have been trained in a field, law, that is exceptionally broad in its compass. at the federal reserve, lawyers are involved in every aspect of our policies and operations – not just because they know the legal niceties, but because they possess analytical tools that bear on almost any problem. in law school you have honed your skills in reasoning, reading, and writing. many of you have work experience or bring backgrounds to bear ranging from history to political science to the humanities to science. there will always be a need for people with your abilities and talents. so, my advice to you is to stay optimistic. things usually have a way of working out. my second piece of advice is to be flexible, even adventurous

guy debelle : some recent ( and not so recent ) trends in australian debt markets address by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, to the kanganews dcm summit 2013, sydney, 19 march 2013. * * * thanks to christian vallence and tom williams for their help. thank you for inviting me to speak here again. today, i ’ m going to talk about the local debt market. i ’ ll talk about the current state of play as well as a bit of history. market developments this time last year, debt markets globally weren ’ t in great shape, though the local market wasn ’ t faring too badly. a year on, global debt markets are in a much better position, with issuance strong across most parts of the market, spreads considerably lower and the absolute level of yields very low by historical standards. the market ’ s assessment of the likelihood of extreme outcomes has declined. the risks in europe are still predominantly negative, but in china, the us and non - japan asia, the risks are much more balanced – one can even conceive of upside surprises! australia ’ s financial markets have been influenced by these global factors. at the same time, domestic markets have benefited from strong international demand for australian dollar assets. local issuers continue to be viewed favourably by offshore investors looking to diversify credit exposures. yields on commonwealth government securities have moved in line with global government bond yields. they are around post - federation lows, as this very long - run graph demonstrates ( graph 1 ). semi - government spreads have tended to move in a fairly tight range. yields on state government debt are also around their lowest since federation, notwithstanding the occasional ratings downgrade. graph 1 bis central bankers ’ speeches demand for cgs from offshore investors remains strong ( graph 2 ). the share of foreign ownership has come off its recent peak but net purchases have still continued, just not in line with the pace of issuance. there have been reports of japanese investors selling, in large part because of the high level of the aud / jpy exchange rate, but these sales have been more than compensated for by increased purchases by other investors. 1 the foreign ownership of semis has been relatively constant, partly reflecting the preference the foreign official sector generally displays for sovereign or highly rated supranational paper rather than state or provincial debt. instead, much of the increase in semi supply over the past couple of