to inconsistent mandating requirements among the jurisdictions in which they operate. on that issue, i note that the financial stability board has recently begun discussions on the challenges of mutual recognition, though these are still at an early stage. adding further to the complexity is that the environment is already being shaped by regulatory developments in the major jurisdictions, especially the us and europe. australian entities that are active in those markets will need to meet the clearing requirements that soon come into force there, and they will also be affected indirectly to the extent that they deal with counterparties that are subject to those jurisdictions. in the united states, the dodd - frank regulations on otc clearing are likely to start taking effect around the second quarter of next year, and in europe the corresponding regulations under emir5 are likely to take effect by around 2013. even before then, market behaviour, and hence the environment for the australian banks, will be influenced by the anticipation of those requirements. in broad outline, then, these are some of the key considerations that will need to be taken into account in determining the way forward in australia. this brings me to my third question : where does the policy process in australia now stand? in june, as you know, the council of financial regulators6 released a discussion paper setting out these issues in detail and calling for submissions from interested parties. to help focus discussion, the council paper put forward four propositions. in summary, these were : that in the absence of australian regulatory action, domestic ccp solutions may not emerge ; that where a market is of systemic importance to australia, a move to offshore central clearing might introduce risks to the australian financial system that do not currently exist ; that the council agencies considered the market for australian dollar interest rate swaps to be systemically important within australia ; and that in light of this, the council agencies were considering the case for a requirement that those instruments be centrally cleared, and as part of that were considering whether such clearing should take place domestically. i stress that these were not conclusions. they were preliminary propositions that the council agencies were seeking to test. in response to the paper, we have received around 30 submissions, including one from isda and a good number from isda members who are no doubt represented here today, along with others from a range of other market participants and interested parties. most of the submissions are available on the bank ’ s website. council agencies have also engaged in a series of follow - up meetings with those who made submissions. i ’ ve

participated in a number of those myself, and i ’ ve appreciated the spirit in which the industry has provided its input. if i ’ ve conveyed anything today, it ’ s that these are difficult and complex issues. most of the submissions have stressed that point, and there was a strong view from industry that it ’ s european markets infrastructure regulation. comprising the reserve bank of australia, asic, apra and the australian treasury. bis central bankers ’ speeches important to take the time to get it right. 7 we take the complexities seriously, and we need to continue engaging with industry in the process of determining the best way forward. that said, the council ’ s advice on these matters, when it ’ s made, will be determined by the public policy considerations of stability and efficiency that i ’ ve just outlined. not all industry participants will have the same commercial interests and not all will be of the same view as to their preferred outcome. but where the industry contributions will be valuable is in helping to make clearer what are the costs and benefits, and the risks, of the alternative approaches. we hope to be in a position to put forward some conclusions from the consultation process soon, but i can ’ t foreshadow those today. in the meantime, i take the opportunity to thank all those in the industry who have made constructive contributions, and we look forward to continued engagement. but not too long. others have pointed to the need to respond in a timely way to the rapidly changing international environment. again, it ’ s a question of balance. bis central bankers ’ speeches