needs to make “ trade work for all. ” that includes using e - commerce platforms to promote free trade for smes across the g20, and it requires an urgent and critical examination of trade in services. see https : / / www. oecd. org / eco / growth / oecd - 2015 - the - future - of - productivity - book. pdf. see the report written by the productivity leadership group, chaired by sir charlie mayfield, ( 2016 ), ‘ how good is your business really? raising our ambitions for business performance ’, available at : https : / / howgoodisyourbusinessreally. co. uk /. see ‘ the world trade slowdown redux ’, bank underground blogpost, available at https : / / bankunderground. co. uk / 2016 / 12 / 12 / theworld - trade - slowdown - redux / and frenkel, j. and rose, a. ( 2000 ) ‘ estimating the effect of currency unions on trade and output ’, nber working paper no. 7857. as noted in ‘ the spectre of monetarism ’, speech given by mark carney, roscoe lecture, liverpool john moores university, 5 december 2016, available at http : / / www. bankofengland. co. uk / publications / pages / speeches / 2016 / 946. aspx. all speeches are available online at www. bankofengland. co. uk / speeches in this context, brexit in general and financial services in particular will be key tests of the world ’ s capacity to build a path to stronger, more sustainable growth. iv. levelling down or up : managed trade or free trade in services? one cause of global imbalances is the uneven playing field between trade in goods and services, with barriers to services trade currently up to three times higher. most of the world ’ s major surplus countries, like germany and china, are net exporters of goods and benefit from this asymmetry. conversely countries with a comparative advantage in services, like the us and uk, are more likely to run current account deficits ( charts 5 and 6 ). chart 5 : correlation between current account balances and comparative advantage in services sources : barattieri, a. ( 2014 ), ‘ comparative advantage, service trade, and global imbalances ’, journal of international economics, vol. 92, issue 1, un

clearing to move to a more efficient and resilient hub in london. the bank of england also must concern itself with the resilience of ccps in other european and non - european jurisdictions that are used by firms that we supervise. these ccps must be subject to robust regulatory standards and deep reciprocal supervisory cooperation. to address such issues, we can and should build on current models to develop a new form of regulatory and supervisory cooperation. the european commission ’ s proposals announced last week recognise the importance of effective cooperation arrangements between the relevant eu authorities and their overseas counterparts. they include potential provisions for deference to the rules to which a ccp is subject in its home jurisdiction in line with the intent of the g20. the bank welcomes this. the commission ’ s proposals, driven in part by brexit, address an increasingly important and more general issue in the regulation of the international financial system. requiring up to another €5bn of capital. see, for example, the g20 leaders ’ communique, brisbane summit, 16 november 2014, available at http : / / www. g20australia. org / official _ resources / g20 _ leaders _ communique _ brisbane _ summit _ november _ 2014. html. all speeches are available online at www. bankofengland. co. uk / speeches elements of these proposals could therefore provide a foundation on which to build robust cross - border arrangements for the supervision of ccps. this should be based on deep cooperation between jurisdictions and authorities who defer to each other ’ s regimes where they meet international standards and deliver similar outcomes. coming to an innovative, cooperative and reciprocal agreement on central clearing would promote competitive financing in the euro area and maintain the resilience of the uk and global financial systems. more fundamentally, it would be an early milestone in the broader rebalancing of the uk, european and global economies. and it would produce far superior outcomes to other elements of the commission ’ s proposals, which would fragment global clearing activity and raise costs and risks. v. conclusion my lord mayor, this building, with all its majesty and history and this topic, central clearing of derivatives ; could not appear farther from the concerns of people in this country. but they are much more closely related than they appear. a decade of radical financial reform was not an end in itself, but rather a means to serve households and businesses better. we must ensure that the real economy reaps its full benefits,