needs of the whole market. explanation ( 4 ) : concern about the cost of signing up and implementing the code – “ this is just one of many things we are being asked to comply with. we act for 1000s of different investors, with multiple expectations and mandates. our regulatory team is overwhelmed. ” we understand that buy - side firms face many competing challenges, and have taken steps to help with implementation. i have already mentioned the proportionality principle that lies at the heart of the code, and the steps that the new gfxc buy - side groups will be taking to help improve understanding and promulgate best practice for implementation. in the uk, the investment association is also finalising with its members a guide intended to assist firms navigate their own assessment of the code ’ s requirements against existing requirements, for public release in early 2019. all of these should help firms looking for assistance in signing up. https : / / www. fca. org. uk / about / recognised ‐ industry ‐ codes all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx but it is worth remembering too the cost of not supporting the code : the heightened risk of returning to the doubt, uncertainty and collapse in trust in the operation of the fx and other core wholesale markets that we saw a decade ago, and the more restrictive regulation that would inevitably follow. the code offers the opportunity for the market collectively to recognise its responsibilities in a fair, balanced and cost effective way in the interests of the users of the capital markets : your customers. conclusions if there was one lesson of the financial crisis ten years ago, it was the importance of the market taking collective responsibility for raising and maintaining standards in financial markets, of which foreign exchange forms a vital part. buy - side firms, as huge and growing players in those markets, have a vital role to play in that. by signing up to the global code, you signal a commitment not just to uphold those standards yourselves, but also to hold others to them – and in so doing help ensure the markets remain deep, liquid, safe and fair to everyone. over the coming year, the global fx committee and the broader international community will be working towards bringing the level of signup to the code on the buy - side up towards that seen on the sell - side. please join us in that campaign. all speeches are available online at www. bankofengland. co. uk

fair value - method would give a good estimate of future cash flows. if the bank specialises in hold - to - collect management of financial instruments, then unrealised gains should not be part of its own funds. obviously, i ’ m implicitly referring to the revision of standards for financial instruments : the conversion of ias 39 to ifrs 9. i ’ m glad we are converting, as the new standard is a big improvement. for the resulting simplicity will not only help to tell a clear story, but also enhance financial stability. and this is just what the main categories “ amortised cost ” and “ fair value through profit or loss ” will do. i know, of course, that the iasb is considering introducing a third category, the so - called fair value through other comprehensive income, or fvoci. i ’ ve been told that this new category resembles an old one, the available - for - sale category. the very category that caused a lot of uncertainty during the crisis. i would therefore advise the board to see to it that this third category is made subject to robust conditions, to ensure that this regulation leaves no leeway for arbitraging. finally, i would say that converting from incurred loss to expected loss would greatly improve things. as i said earlier, accounting principles should take into account expected losses as soon as they are perceptible. this means that the expected loss notion becomes part of the amortised cost principle. and i view this notion as quite similar to fair value notions that include losses in market indices. these also tend to bear a forward - looking element. to some this may come as a surprise, but in my mind both approaches would give us very clear estimates of possible credit risk losses. and, of course, this would serve financial stability. the iasb has been working on the conversion from ias 39 to ifrs 9 for a while now. i look forward to its swift implementation. in closing, i would like to leave you with three basic principles : one : transparent reporting of expected and unexpected losses contributes to financial stability. we should make buffers in own funds for unexpected losses and book in the expected losses as part of the new amortised cost valuation method. two : prudential regulators and accounting standard setters such as the iasb share an interest. prudential regulators promote sound risk management practices – and accounting standard setters promote sound financial reporting. both are prerequisites for a