much more transparent and resilient way and could have mitigated the negative chain reaction on cds markets that followed the demise of lehman. ccps and trade repositories for otc derivatives are ultimately beneficial for all stakeholders. still, there are the well - known challenges of effective collective action in the context of the provision of public goods. hence, private sector efforts alone may not suffice to foster sufficient progress towards the use of ccps and trade repositories for otc derivatives. it is therefore important to adopt and implement the regulatory requirements for the mandatory central clearing of all eligible products and the reporting of trades to trade repositories in a timely manner. given, however, the global nature of otc derivatives markets, it is clear that such regulatory tools will only be successful if they are applied in a coordinated manner around the globe. i strongly support the recently launched work of the financial stability board to develop common approaches to fostering the central clearing of eligible otc derivatives as well as to expand the range of potentially clearable products through enhanced standardisation. the second priority relates to the need for updated and globally consistent requirements to ensure the safety and soundness of financial infrastructures. by nature of their business, financial infrastructures concentrate systemic risk, owing to their large size, their limited degree of substitutability and the strong web of mutual interdependencies across infrastructures, e. g. arising from exposures to the same large participants. increased reliance on market infrastructures across financial markets further underlines the importance of effectively addressing this risk. therefore, it is crucial to ensure that ccps are able to manage these specific risks related to the clearing of otc derivatives. furthermore, trade repositories need to be designed, operated and overseen in an adequate manner, given the novelty of these infrastructures and the reliance of other market infrastructures, public authorities and market participants on the accuracy and availability of the respective data. two complementary strands of work are underway in these fields. first, legislation for otc derivatives ccps and trade repositories is being developed in several countries. and second, the international standards for financial market infrastructures are currently being reviewed by the cpss and iosco. in this respect i believe that given the importance of a globally consistent framework for market infrastructures, it is critical to ensure that all relevant national and regional legislation is drafted in a sufficiently flexible way to allow for the effective accommodation of the work

thus important that the central bank submit a regular report to the legislature, government and public on its policy and the achievement of its goals. the report should describe the decisions made and the reasons behind them, the instruments employed and how they were operated, the resources employed and how they were used, etc. thus, for example, with regard to interest rate policy, central banks, including the bank of israel, usually publish annual reports, economic forecasts, periodic inflation reports, minutes of interest rate discussions, press releases on decisions taken, etc. this framework of transparency and accountability ensures an open channel of communication between the central bank and the public in general, and the financial markets in particular, and constitutes an important mechanism of control over the central bank, its management and its policies. it enables the central bank to stay attuned to public criticism, and it enables the public to better understand the functions, policy, decisions and achievements of the central bank. the two subjects i have spoken about so far, central bank independence and the requirement for transparency and accountability incumbent on the central bank lead me to my main subject this evening. iii. the new bank of israel law the new law will clearly define the independence of the bank, its goals, and the mechanisms for decision making, and should impose on the bank a comprehensive framework of transparency and accountability. the new law should thus contain the correct mixture of independence, transparency and control mechanisms for the bank of israel, all, of course, according to the generally accepted standards in the advanced economies. in my first few months as governor of the bank we cooperated with the ministry of finance, the prime minister ’ s office and the ministry of justice in drafting a bill. we decided to shelve the matter temporarily until a wage accord at the bank was concluded, but now we are taking it up again. i hope that we will soon work out a final draft. 1. independence of the bank of israel the new law will give the bank of israel independence in making decisions about the interest rate as needed to perform its functions and reach its goals. this independence must also be reflected in the management of the bank, as that is the means by which it creates the instruments required to meet its goals. 2. definition of the objectives of the bank of israel the new law will clearly define the bank of israel ’ s targets, along the lines of the targets of other modern central banks. the modern approach, and that adopted in the major central banks such as the bank