of introduction of the instrument itself. thus, in compliance with the g - 20 commitments, trade reporting arrangement for various otc interest rate, foreign exchange and credit derivatives have since been completed. reserve bank of india will periodically assess the extent of use of various otc derivative instruments and will introduce reporting for other derivative instruments as and when market participants start actively using these instruments. going forward, the reported otc derivative transactions will be used for strengthening reserve bank of india ’ s conduct of surveillance of otc derivative markets, financial stability assessments and, micro - prudential supervision of banks and pds apart from disseminating the price and volume information ( anonymised ) for enhancing transparency of the indian otc derivative markets. v. iv. ii standardisation 37. gandhi working group has recommended that irs contracts should be standardized and swap execution facility ( sef ) may be introduced for irs trades. against the backdrop of g - 20 commitment and in order to improve tradability and facilitate migration of irs contracts to centralized clearing and settlement in future, it has been decided to standardise inter – bank irs contracts. the irs contracts shall be standardized in terms of minimum notional principal amount, tenors, trading hours, settlement calculations etc. which will be prescribed by fimmda in consultation with the market participants. to begin with, standardisation has been made mandatory for rupee overnight index swap ( ois ) contracts from april 1, 2013 and will be extended to other benchmarks in due course. forex derivatives are currently non - standardised as they are primarily driven by customised client needs. with regard to cds, the product is standardised since inception. it has been decided that the option of ccp for settlement could be examined once volumes improve and reach critical mass. bis central bankers ’ speeches v. iv. iii swap execution facility 38. with regard to introduction of sef, a trading system for irs is expected to be operational in the second half of 2014. a related issue is whether these derivative trades can be moved to exchanges. the sef cannot be compared to exchanges as they are mainly accessed by institutional investors ( including dealers - brokers ) for trading in specialized products and in large amounts. it is essential to maintain the distinction between exchanges and sef because exchanges are meant to provide access to retail investors whereas sefs are for institutional investors who access the market to provide liquidity and / or manage their balance sheets. exchange traded irs may not cater to the needs of

and growth pact obliges participating eu member states to achieve budgetary positions close to balance or in surplus in a sustainable manner, in order to minimize the risk of breaching the budget deficit criterion of 3 % of gdp, according to the treaty of maastricht, in the course of a business cycle. sound budgetary positions not only create enough leeway for automatic stabilizers to take full effect in economic slumps, they also contribute to reducing the debt - to - gdp ratio and consequently the interest burden for governments, increase investors ‘ confidence in the euro area, keep interest rates lower than they would otherwise be and, as a consequence, lead to a crowding - in of private investment. thus, the current economic slowdown should not distract governments from the successful consolidation process we have witnessed so far. ladies and gentlemen, perseverance in structural reforms of product, capital and labor markets constitute an important foundation for vibrant and strong euro area economies, underpinning the euro as an anchor of stability. product markets in the european union have already undergone sizable improvements, though we should not underestimate how important it is to fully implement internal market legislation and, for example, further reduce state aid. in concert with independent and powerful competition authorities, these types of measures would not only help make economies more efficient and competitive, but would also play their part in ensuring price stability. in addition, it is of utmost importance that the eu continues to be committed to trade liberalization and that we support the opening of a new trade round within the wto. moreover, the introduction of the euro has accelerated structural reforms in the european financial markets. apart from making financial markets less fragmented and more competitive, it is important that these developments lead to an efficient and stable financial system. the recent tragic events in the united states have shown how quickly financial markets can come under severe stress – and that sound and well supervised markets, with the backing of liquidity provided by central banks, can cope even with such dreadful events. as regards labor markets in the euro area, continuing high structural unemployment and low participation rates in many member countries are a cause for concern. obviously the functioning of labor markets needs to be improved to allow higher employment. wage settlements in line with productivity developments appear crucial for the attainment of a sound macroeconomic policy mix. the social partners are called upon to continue to act in a responsible manner, thereby enhancing prospects for healthy growth and employment. if the just mentioned macroeconomic and structural safeguards are