systems are built. these things take time, and time is running out. conclusion the libor transition is a serious issue the industry needs to address. both the official sector and market participants have made enormous progress, but we need to see much broader and consistent preparation for the transition. if your firm is one of those hoping the problem will go away, or feeling nostalgic and counting on an extension to the deadline, take this message back : the clock is ticking, libor ’ s days are numbered, and we all need to play our part in preparing the industry for january 1, 2022. thank you, and i hope you enjoy today ’ s conference. 1 federal reserve bank of new york, statement regarding repurchase operations, september 20, 2019 2 for recent statements regarding the fomc ’ s longer - run monetary policy implementation framework and balance sheet normalization, see fomc communications related to policy normalization. 3 john c. williams, 901 days, remarks at the securities industry and financial markets association, new york, july 15, 2019. 4 alternative reference rates committee, second report, march 2018. 5 financial conduct authority, fca statement on libor panels, november 24, 2017. 4 / 5 bis central bankers'speeches 6 andrew bailey, libor : preparing for the end. speech at securities industry and financial market association libor transition briefing, july 15, 2019. 7 alternative reference rate committee, the arrc selects a broad repo rate as its preferred alternative reference rate, june 22, 2017. 8 international organization of securities commissions, principles for financial benchmarks, final report, july 2013. 9 international swaps and derivatives association, interbank offered rate ( ibor ) fallbacks for 2006 isda definitions, may 16, 2019. 10 see the letter from the ossg to the isda dated march 12, 2019. 11 see alternative reference rate committee, fallback contract language. 12 see margin and capital requirements for covered swap entities. 13 see fasb proposes guidance to assist in transition away from interbank offered rates to new reference rates, financial accounting standards board news release, september 5, 2019. 14 u. s. securities and exchange commission, staff statement on libor transition, july 12, 2019. 15 financial stability board, overnight risk - free rates : a user ’ s guide, june 4, 2019. 16 alternative reference rates committee, practical implementation checklist for sofr adoption, september 2019. 5 / 5 bis central

of decision for economic policy ”. this coordination body for economic policies should have been established alongside the european system of central banks, i. e. the monetary authority. both institutions were to be independent from the national governments, being politically accountable only to a european parliament. this independent economic authority should have influenced the national budgets with a focus on the level and the direction of the balances as well as the financing of deficits and the use of surpluses, respectively. the werner report also advocated a certain degree of tax approximation especially for cross border activities. when the intergovernmental conference on emu started, europe had endowed itself with a parliament, but with limited powers and no capacity to levy taxes and to control centralized policy making at european level. most european resources were transfers from national budgets. tax sovereignty was left untouched after a timid attempt to change tack in the socalled guigou group set up by president mitterrand to prepare the conference. during the conference an attempt by belgium and italy to move into the tax area ran into massive resistance. political union was off the agenda and loose coordination of economic policies was deemed sufficient. it was believed that market discipline would install responsible behavior in the fiscal and competitive position of countries. the land grabbing attitude of the european commission pretending to be the economic and fiscal authority in the event of more integration indirectly strengthened the case for the intergovernmental approach and the socalled own responsibility of each individual country in this respect. it can seem surprising that governments were so confident about market discipline and reactive national policies when one major factor of self - correction within a currency union was by design rather weak in europe, namely labour mobility. true, progress has been made in language knowledge, university students exchange, diploma recognition and access to professions. mobility is good at the lower and higher skill ends, but the high share of closed public service in europe, non - portability of pension rights, rigid labour laws and cultural differences make labour mobility a slow process. therefore in 1997 the treaty was complemented by the stability and growth pact which has mostly focused on fiscal deficits. the result proved insufficiently coercive and was even further weakened when germany and france failed to abide by the rules in 2003. the absence of a meaningful macro - economic surveillance led to heterogeneity which was further accommodated by the absence of expected market reactions. today we have to acknowledge that market reactions often come with delays and then tend to overreact. but let