three appears, at present, to be marred with varying degrees of uncertainty. many are concerned with downside risks to global potential growth, which would be highly relevant for the trend in the growth outlook in an open economy such as south africa. uncertainty about the longer - term impact of the pandemic may in itself result in lower global capital accumulation, especially at a time when corporate profit rates are declining and global trade, which is historically a driver of investment, is still contracting. 4 indeed, supply concerns experienced at the height of the pandemic – for example, in the procurement of medication or personal protective equipment – may entice authorities to reduce reliance on global value chains, or at least reduce the length in the supply chains and reliance on single suppliers. some economists also highlight the possibility of durable labour market ‘ scarring ’, which would risk the permanent loss of skills, and make it more difficult to match labour supply and demand in the future. 5 admittedly, other shifts could be more positive for potential growth. the sudden imposition of the lockdowns certainly forced many firms to speed up their adaptation to different ways of work and of doing business, which, if implemented on a larger scale in the coming years, could see ‘ productivity and gdp prospects : some gain, much at risk ’, global economic outlook and strategy, citi research, august 2020. see j kozlowski, l veldkamp and v venkateswaran ‘ scarring body and mind : the long - term belief - scarring effects of covid - 19 ’, 2 september 2020. boost productivity. automation, e - commerce and remote working are all likely to play a greater role in economic activity in the coming years. yet it is not clear whether all economic sectors would benefit equally from such changes and, also, whether these changes in the ways of work could be implemented as easily in emerging economies that still rely more heavily on primary and secondary industries. 6 and what about inflation? economists at a large global investment bank recently reviewed major ‘ regime shifts ’ in the inflation of key economies over the past century, and found that common drivers are a combination of supply - side constraints or reforms, exogenous shocks, fiscal issues and institutional changes. 7 at present, central banks across the world remain, by and large, committed to inflation targeting, and when changes are being made to the framework, these are generally moderate and aim to correct durable undershoots of targets rather than to

current efforts to address these deficiencies because i know that you have discussed them during the past two days. however, i wish to emphasize that although these regulatory reforms have been primarily designed to respond to the needs and dynamics of the derivative markets in advanced economies, regulators in emerging market and developing economies will be required to comply with these rules if they wish their markets to be accepted as part of the global financial system. while this is understandable and we fully intend to comply with the final rules, it is important to recognize the challenges present in our own markets. one benefit of forums like this one is that it enables participants from emerging markets to meet and exchange views on otc derivative reforms. this is important for a number of reasons. firstly, while, it serves the global interest to achieve standardization in derivative transactions ’ contracting, pricing and documentation, it is also important to make sure that the interests of all stakeholders are adequately addressed in the ways these transactions are standardized. if emerging market and developing countries do not have opportunities to discuss these matters, with appropriate attention to all the technical details, amongst bis central bankers ’ speeches themselves, this is less likely to happen. second, we all have a vested interest in derivative transactions that are transparent and as safe as possible. in principle, this can be most easily achieved through standardized transactions executed through central counterparties and reporting to trade repositories. in practice, however, not all countries derivative markets are big enough to support the necessary market infrastructures. as such, they would require more flexible approaches to otc derivatives than is the case in the larger advanced economies. this suggests that there is a need to collaborate on developing regulatory proposals that are appropriate to our conditions. if we do so, and can undertake the research and preparations needed to develop the arguments to support our preferred approach, i am confident, based on past experience, they will receive a fair hearing and where appropriate, will be incorporated into the current international proposals for regulating otc derivative markets. 5. conclusion in many ways, financial markets in emerging market and developing countries are still developing. the benefits that derivative markets offer and the challenges they bring, therefore, are not necessarily comparable with the benefits and challenges applicable to advanced countries. in addition, the benefits and challenges associated with derivative markets in specific countries may differ due to our markets ’ differing stages of development. for this reason it is valuable for us to be able to share views and exchange experiences and to learn from each other. i hope that you all