stretched supply capacity. yet this has not derailed the global economic expansion. unlike the opec oil shocks of the 1970s, when the supply of oil was sharply curtailed, creating significant disruption for economic activity, over the past few years the supply of oil has been increasing – just not fast enough to accommodate rapidly rising demand at the old, low price. far from crippling global growth, the higher price of oil reflects strong growth. higher oil prices do reduce growth compared with what might have been possible had the supply of oil been perfectly elastic, but even with that reduction, the world economy is recording quite good growth. one illustration of this is that, eighteen months ago, the imf forecast of global growth for 2005 was 4. 4 per cent, with oil prices assumed to be under us $ 30. the latest estimate for 4 / 8 2005 is virtually unchanged at 4. 3 per cent ( with the same again expected in 2006 ), but with an average oil price now assumed to be us $ 54 in 2005, and us $ 62 in 2006. monetary policy and oil prices how should monetary policy, in particular, respond to rising energy prices? traditionally, policy - makers have abstracted from the effects of short - term fluctuations in oil prices. the case for doing so was that these swings are often driven by temporary supply - side disturbances. it would not make sense for monetary policy, whose effects take several years to play out, to respond to price fluctuations which might be reversed within a matter of months. fluctuations in prices for some other things affected by supply disturbances – like fresh food – are treated the same way. it is for this reason that many central banks compute measures of'core'or'underlying'inflation – it helps us get a better idea how overall inflation will look when temporary disturbances have passed from the scene. similarly, in cases where there is a large, permanent but one - time change in the level of energy prices which occurs because of a change in supply, it is not feasible for monetary policy to offset the immediate impact on the overall price level. policy - makers in that situation will focus on ensuring the on - going rate of change of prices settles back fairly promptly. this means they will typically respond to signs of second - round effects which might emerge if, say, other prices or wages began to change in response to the initial oil price effect. but where there is a persistent trend for some particular price to rise quickly over a longish period because demand is strong

: first, it ’ s a single code for the whole industry and second, it ’ s a global code. it ’ s intended to cover all of the wholesale fx industry. this is not a code of conduct for just the sell side. it is there for the sell side, the buy side, non - bank participants and the platforms ; its breadth is both across the globe and across the whole structure of the industry. the code is intended to apply to all aspects of the wholesale foreign exchange market. i am chairing this work, with simon potter of the federal reserve bank of new york leading the work on developing the code and chris salmon of the bank of england leading the adherence work. our working group comprises representatives of the central banks of all the major fx centres in both advanced and emerging economies, drawing on the http : / / www. bis. org / press / p150511. htm. bis central bankers ’ speeches membership of the markets committee which is comprised of heads of the market operations areas of the 15 major currency areas. given our roles, we are all very much interested in the effective functioning of the fx market. again, it is very much a global effort reflecting the global nature of the foreign exchange market. this work is also very much a public sector - private sector partnership. in that regard, we are being ably and vigorously supported in this work by a group of market participants, chaired by david puth, ceo of cls. the group contains people from all around the world, on both the buy side, including corporates and asset managers, and the sell side, along with trading platforms, ecns and non - bank participants, drawing from the various foreign exchange committees ( fxcs ) and beyond. hence all parts of the market are being involved in the drafting of the code to make sure all perspectives and insights are heard and appropriately reflected. at the global meeting of the foreign exchange committees yesterday, the eight regional fxcs unanimously endorsed the first phase of the code. at the outset we decided to split the topics we intend to cover in the code into two parts. this first phase covers areas such as ethics, information sharing, aspects of execution and confirmation and settlement. the second phase will cover further aspects of execution including e - trading and platforms, prime brokerage, as well as governance, and risk management and compliance. we intend that the second phase will be completed in twelve months, such that the full code can be published in may 2017