volatility might appear to suggest that global markets are not expecting large changes in asset prices. and yet, in a short period over the end of last year and start of this one we saw very sharp moves across asset markets in response to what seemed relatively modest amounts of news. between mid - october and the end of the year spreads on investment grade bonds, for example, went up by around 50bps. all speeches are available online at www. bankofengland. co. uk / speeches since then, these moves have completely retraced – spreads at the start of may were the same as they were in mid - october last year. bonds in other currencies and high yield bonds went on a similar round trip. at one point towards the end of 2018, the s & p was 15 % lower than it had been just 3 weeks earlier – it is now at record highs. 20 the fall in financial asset prices seems to have been due in no small part first to market concerns about future economic growth and the recovery to better news about the world economy and to the signal of greater support to economic growth from central banks than had hitherto been perceived. but the episode may also suggest that when it comes to expectations about the value of debt, the market itself is very sensitive to changes in sentiment and a correction might come very quickly, either because of weakening expectations of economic performance or signs of inflation. given the apparent current compression of risk pricing, such a correction could be a sharp one. conclusion the level of the global debt stock relative to gdp remains near its record high, though it has stabilized over the past five years. the sustainable level of debt to gdp is not, however, a constant and there are reasons to believe that the lower trend real rate will likely support sustainability. while less expected, however, a relatively small increase in the trend rate could lead to a reassessment of debt sustainability. while there is evidence that the level of debt, as opposed to the growth rate, does not appear to be a good predictor of recessions and financial crises, the level does seem to be associated with depth of losses when crises occur. the historically high level of debt may generally suggest a higher vulnerability in periods of stress. the composition of debt, within the aggregate numbers, has changed since the crisis. emerging market debt has grown as a proportion of the global debt stock, over the past 10 years, with much of the increase driven by china. advanced economy public

of water and electricity. this task is now being fulfilled by the bureau of telecommunications and post ( bt & p ). bis central bankers ’ speeches ladies and gentlemen, i would like to turn now to the best practices that have evolved during the last several years. for effectively regulating the water and energy infrastructure services some form of regulation is needed. best practices in recent years point at the creation of autonomous and independent institutions. this is only possible if there is a political commitment to facilitate this development as the regulatory decision making powers are transferred from the government ( minister ) to an independent regulator, sourced out through a regulatory contract or to an expert panel. the commitment of the government should be shaped in a constitutional and legislative framework. the aim of establishing an independent regulatory board is to encourage efficient, low - cost, reliable service provision, to ensure financial viability and to facilitate new investments. furthermore, it will insulate tariff setting from political opportunism and make decisions more transparent and predictable. one of the constraints of setting up independent regulatory agencies is the institutional capacity. it is often difficult to find a competent institution and staff. in this and next sheet, i will give an overview of the status of energy policies in selected caribbean countries. a number of caribbean islands already have depoliticized the decision making process and instituted regulators. bis central bankers ’ speeches in barbados – we often mirror ourselves against this caribbean island – a regulatory body exists since the middle of last century. from 1955 till 2001 the public utilities board was responsible for regulation. on january 2nd, 2001, the fair trading commission was established with a much broader mandate than its predecessor. its duties include among other things : determining principles, rates and standards of service for regulated service providers ; monitoring general business conduct ; investigating possible breaches of the acts that it administers ; educating and informing businesses and consumers about the requirements of these acts ; and taking enforcement action when needed. ladies and gentlemen, choosing a regulatory framework for curacao ’ s energy and water sector is not an easy task. however, we can draw upon international best practices and the experiences of our neighboring caribbean islands to help us making the right decisions. we must keep in mind though that best practices do not mean that we should simply apply these concepts to our environment. we have to adapt them to our own specific circumstances. thank you for your attention. bis central bankers ’ speeches