bis central bankers ’ speeches diverse perspectives to bear on the design of best practices, helping to ensure the best practices developed are more effective. central banks ’ role in supporting best practices central banks have an interest in ensuring well - functioning markets – as market participants and for efficient transmission of monetary policy. we also have a stake in enhancing the strength and stability of the financial system as a whole. moreover, central banks can play an important role in the creation of effective best practices by serving as a convening body for market participants, by signaling the importance of best practice efforts to the market, and by encouraging the inclusion of a diverse set of market segments in the development process. first, particularly where otc markets predominate, a central bank can bring together market participants to discuss and address issues collectively. there is a rich history of collaboration between the official sector, the academic community, and industry participants to analyze existing issues, identify emerging risks, and develop guidance for financial markets. over time, the new york fed has led a number of such efforts. for example, the otc derivatives supervisors group addressed emerging risks of inadequate infrastructure for the growing credit derivatives markets. the new york fed and the board of governors convened the alternative reference rates committee, which is currently working to identify a set of alternate reference interest rates for financial products and contracts that are more firmly based on transactions from a robust underlying market and that comply with international standards. 6, 7 similarly, the u. k. official sector worked with a panel of market participants in developing the recommendations in the fair and effective markets review. the new york fed also sponsors two industry groups that have long - term missions focused on best practices. the tmpg is, as you know, a group of market professionals committed to supporting the integrity and efficiency of the u. s. treasury, agency debt, and agency mbs markets. to that end, the group develops guidance to promote market liquidity and transparency, robust control environments, efficient market clearing, and managing large positions with care. 8 the new york fxc examines similar issues in the fx market. it has a long history – more than three decades – of publishing documentation to facilitate fx transactions and market functioning and to articulate best practices. 9 the new york fed is also involved in the bis fxwg to help establish and promote adherence to an fx global code, a single set of guiding principles for the fx market. these groups have confronted collective action problems where an individual firm may want to raise concerns

strive to engage a wide diversity see “ the introduction of the tmpg fails charge for u. s. treasury securities ” for more information. the new york fed has organized workshops and conferences on reforming culture in the financial services industry. additionally, several executives have spoken publicly on the topic. see here for more detail. the g30, the basel committee, the european systemic risk board, and the fsb have issued papers on culture, governance, and misconduct risk. the bank of england ’ s fair and effective markets review called for higher conduct standards for the fixed income markets. the central bank of the netherlands – de nederlandsche bank – has developed new approaches for the supervision of corporate culture and decisionmaking. the mpg is working with the bis fxwg to develop market - based adherence mechanisms for the fx global code. bis central bankers ’ speeches of market participants as we develop best practices. this is to ensure that the practices reflect all relevant segments of the market and to promote buy - in and thus foster their adoption. as i mentioned before, both the tmpg and the fxc are expanding their membership such that a range of market participants feels vested in their missions. in addition, we engage with other sectors of the marketplace, such as trade associations and infrastructure providers, to educate them about best practices that have been developed and facilitate their potential adoption of aspects of them. when central banks operate in the markets ourselves, we expect the best practices to apply. this has two aspects. first, we align our own practices to the best practices, except where it would inhibit our policy functions. as a corollary, we expect those institutions that choose to become our counterparties to comply with the best practices as well, so that when we transact, we do so with the confidence that our counterparties are adhering to these standards of behavior. finally, we keep supervisors, regulators and other official sector bodies, inside and outside our four walls, abreast of the work of our committees. in some cases, they may choose to adopt standards first articulated by our committees as part of their frameworks. 22 conclusion market participants have a responsibility to themselves, their clients, and the financial markets in which they transact to implement best practices within their own institutions and to encourage their clients and other counterparties to do the same. broad adoption of best practices can strengthen each market participant ’ s existing controls, help reduce market disruptions, and ultimately foster greater confidence in the broader financial system.