ravi menon : seeking decent returns in an era of sub - par growth speech by mr ravi menon, managing director of the monetary authority of singapore, at the sovereign investor institute government funds roundtable, singapore, 6 november 2014. * * * mr scott kalb, executive director, sovereign investor institute distinguished guests, ladies and gentlemen, good morning. the global conjuncture the major economies of the world are at an inflection point. in the us, the era of quantitative easing has come to an end. next year, for the first time in eight years, we are likely to see a hike in the fed funds rate. • the good news is that monetary policy normalisation will occur in the context of a strengthening us economy. • the bad news is that for financial markets conditioned by persistently easy monetary conditions over the last six years, there is considerable uncertainty over the pace and extent of interest rate normalisation. • the federal reserve has done as best as it can in communicating its approach through forward guidance. but there is many a slip between cup and lip that could to lead to disorderly market adjustments. in the eurozone, there is tension between restoring public debt to a sustainable trajectory and supporting a faltering economy. • the ecb has committed to expand the size of its balance sheet by increasing asset purchases, while an active debate rages in brussels on the appropriate balance between reducing fiscal deficits and supporting growth. in japan, the impact of the first arrow of monetary stimulus is at risk of being blunted by the recent consumption tax hike. • the bank of japan has just announced a further expansion in stimulus – an openended asset purchase at a rate of about 15 % of gdp a year until the inflation target of 2 % is met. • meanwhile, the third arrow remains largely in its quiver. in china, the challenge is to strike a delicate balance between implementing the reforms necessary for long - term sustainability while supporting short - term growth and stabilising the property market. • the reform agenda that emerged out of the third plenum offers a credible and comprehensive blueprint for the way forward. • the leadership is keenly aware of what needs to be done and is committed. • but significant execution risks remain. in india, there is a new government in place committed to improving the business environment for investment and building the infrastructure necessary for a strong manufacturing sector. • but india needs to accomplish this while taming inflation and reducing its fiscal deficit, not to mention rec

starting in 1 / 6 bis central bankers'speeches new zealand, australia, and moving to singapore and london as the day progresses, before ending in new york. participation is diverse – with banks, asset managers, corporates, and central banks, each transacting fx to meet different objectives. participants act as principals or agents, and the responsibilities pertaining to each may not be well understood. hence, there could be market failures, asymmetry in information and potential conflicts of interests. good practices are therefore, essential to guide behaviour in the fx market, and to anchor a strong ethical culture within firms. the code will support the nurturing of good practices and in turn, the growth of the fx market across key financial centres, including singapore. unique features of the code codes of conduct have been in existence and are not new. so why will this code be different? there are several factors why this may be the case, including : what the code captures ; who the code will apply to ; how the code was developed and will be maintained ; and how it will be implemented. first, the content of the code is relevant and reflects good practices that should exist in the fx market. the code provides guidance in areas where clarity is needed. for example, after the misconduct came to light, many market participants swung to the other extreme and became highly reluctant to share market colour. this negatively affected market liquidity. the code includes principles on information sharing, stating explicitly that “ the timely dissemination of market colour can contribute to an efficient, open, and transparent fx market ”. additional guidance has been provided on how to apply this principle e. g. while communications should not include specific client names, aggregated and anonymised information can be shared. both positive and negative examples also provide additional practical guidance. second, it will apply to all market participants. previous codes were catered to sell - side participants. this code extends to all wholesale market participants – sell - side, buy - side, non - bank market makers, trading platforms and market infrastructure. a question that we have been asked frequently comes from buy - side participants – why does the code matter to me? the application of the code to all wholesale market participants, including the buy - side, stems from the belief that good practices should apply to all market participants and not only a subset. 2 / 6 bis central bankers'speeches with widespread adoption, the power of market discipline and peer pressure can be immense. this is important for a voluntary