bank ’ s website via a link in this text. 5 in what follows i shall treat the pra board and the pra as one policy making body, referring to one or the other as best fits the context. before moving on, it is worth completing the picture by noting that the pra works alongside the fca, creating what is known as a “ twin peaks ” regulatory structure in the uk. the fca is a separate institution and not part of the bank of england. it is responsible for promoting effective competition, ensuring that relevant markets function well, and for the conduct regulation of all financial services firms including all those authorised and regulated by the pra. this includes acting to prevent market abuse and ensuring that consumers get a fair deal from financial firms. the fca also operates the prudential regulation of financial services firms not supervised by the pra, such as asset managers and independent financial advisers. in consequence it regulates a much larger number of firms than the pra – over 50, 000. but the fca and pra have a joint mou and co - operate closely on a range of matters, most especially for those firms which are regulated by both ie by the pra for prudential matters and by the fca for conduct. policy co - ordination basics the theoretical conditions under which one can achieve a number of different economic policy objectives at the same time was long ago embedded in the tinbergen counting rule 6, named after the great dutch nobel prize winning economist. a necessary condition is that in addition to mark carney as governor, the proposed internal members from may 2015 will be andrew bailey as deputy governor and ceo of the pra ; nemat shafik as deputy governor for banking and markets ; jon cunliffe as deputy governor for financial stability ; paul fisher as deputy head and executive director at the pra. as i speak the independent members are sandy boss, iain cornish, charles randall and martin wheatley as ceo of the fca. mark yallop is due to join on 1 / 12 / 14 and david belsham on 1 / 5 / 15. http : / / www. bankofengland. co. uk / pra / pages / about / default. aspx. see for example, aj hughes hallett ( 1989 ) ‘ econometrics and the theory of economic policy : the tinbergentheil contributions 40 years on. ’ in oxford economic papers, vol. 41, issue 1,

fact there is another even more important, but apparently not as well known, barometer of our economic outlook. i refer to the natural gas price. this is not breaking news, ladies and gentlemen, and members of the media. trinidad and tobago became a gasbased economy 18 years ago in 1996. last year, we produced about nine times more natural gas than crude oil on an energy equivalent basis. a large portion of our energy production and exports are natural gas - based. at central bank, we estimate natural gas now contributes roughly 70 percent to government revenue and oil the remaining 30 percent. the second reason we should not panic over plummeting oil prices is because budgeted revenue estimates are based on the henry hub natural gas price in the united states, even though less than 10 percent of our lng exports go to the united states. we now have more varied lng export markets which consist of south america, europe, the middle east and asia. this means our lng is sold at different prices in these various markets. government ’ s natural gas revenue is based on the net back price for lng at point fortin, which is an average price tallied from the various markets for our lng exports. the henry hub natural gas price is currently trading at us $ 4. 00 per million british thermal units, that is, 45 percent above the budgeted natural gas price. the netback price for lng at point fortin is currently around us $ 5. 50 per million british thermal units, which is double the budgeted natural gas price. however, in some regions, such as asia and europe, natural gas prices are indexed to oil and can move in tandem with movements in oil prices. even so, central bank estimates the netback price for lng at point fortin would have to fall by 50 percent for an extended period of time to significantly compress energy revenues. therefore, the bottom line is this : falling oil prices should not have an immediate impact on our budget, as 70 percent of our revenue comes from the sale of natural gas - based exports which are currently trading at double the budgeted natural gas price. bis central bankers ’ speeches the third reason we should avoid hysteria over falling oil prices is that the minister of finance and the economy has several fiscal options he can exercise to adjust to a shortfall in energy revenues. last friday, minister howai, indicated his plan of action would be to slash $ 1. 3 billion in expenditure across ministries. the