are being driven by various initiatives, such as the promotion of non - bank participation and the enhancement of industry standards. accelerating these efforts would lead to greater effectiveness of monetary policy in asia. interest rate benchmark reform before closing, i will comment on interest rate benchmark reform. it would be beneficial to share some key points of interest related to this issue, as there are active discussions in various markets throughout the world. in the wake of the libor manipulation scandal, more reliable and robust interest rate benchmarks have been pursued. in addition, libor will most likely be permanently discontinued after the end of 2021 judging from the announcement by the u. k. financial conduct authority in july 2017 that the survival of libor cannot be guaranteed. libor is the most widely - used benchmark in the global financial system and its discontinuation would have a significant impact on asian markets. for example, the transition from u. s. dollar libor to an alternative risk - free rate would be necessary in cases where the u. s. dollar is funded via cross - currency swaps. accordingly, the other leg of the swap could also be affected. we should also bear in mind that the discontinuation would affect a wide range of market for details, see emeap working group on financial markets ( 2018 ), " emeap money markets : survey report. " participants in asia. the latest emeap report8 on a survey among member central banks on this issue stresses the importance of raising awareness of the potential discontinuation of libor among institutional investors and non - financial corporates in particular. in japan, initiatives to prepare for the possible discontinuation of japanese yen libor have been taken by the cross - industry committee on japanese yen interest rate benchmarks. the bank of japan serves as secretariat on the committee, which is composed of a wide range of parties including financial institutions, institutional investors, and non - financial corporates. the committee has also expanded its deliberations into a public consultation and a wide range of outreach activities, such as holding a forum for non - financial corporates and industry associations ( chart 4 ). as a result, market awareness has been gradually growing and proactive initiatives towards interest rate benchmark reform, such as libor exposure mapping, have been launched. the permanent discontinuation of libor would be one of the most significant events in global financial history, and the deadline is unavoidable. it is

and trade them for consumption goods when they are old. to make the analysis even more transparent and mechanical, i make the extreme assumption that the young are constrained not to consume but to save. thus, unlike usual overlapping generation models, there is no utility maximization of the young : the young produce the consumption goods, trade them with the old to get psv assets, and save them for the next period. in this economy, there is only one market, in which the consumption goods produced by the young are traded for psv assets possessed by the old. the supply of consumption goods is equal to the number of young people, since one young person produces one unit of the consumption goods and, by assumption, she does not consume it. the supply of psv assets these sophisticated models ( e. g., dynamic stochastic general equilibrium models ), which are now the popular workhorses of macroeconomic analysis, typically assume life - long utility - maximizing representative agents who live infinitely ( or in more sophisticated settings, decease probabilistically with a constant proportion ) and are endowed with ability to form true - model - consistent own macro econometric models in an economy with the rest of the world as exogenously given. because of these settings, it is not easy to analyze the effects of the unexpected incorporation into the market - economy world of former communist countries with huge populations, and the subsequent rapid ageing of the market - world population, that is, the increase in the old as a proportion of the population. bis central bankers ’ speeches possessed by old people is fixed by definition. thus, the purchasing power of psv assets, or the price of psv assets in terms of the consumption goods is : price of the psv asset = ( number of the young ) divided by ( quantity of the assets ) since the quantity of psv assets is fixed, the change in the number of the young determines the change in the price of psv assets. consequently, the psv asset price inflation rate is : psv asset price inflation rate = ( ratio of the young to the old population ) – 1 this model is admittedly simplistic : specifically, it is stripped of consumption and saving decisions ( optimization ), capital stocks ( including human capital ), and technological progress. more realistic models may bring smoother generational consumption / rate - of - return paths through capital stock formation, and so on4. however, the demographic factors explained in this simple example