most of the timetable set for libor to end is for markets to focus on transitioning away from it, to new risk free rates. for sterling markets, to the new risk free rate is sonia, an overnight benchmark provided by the bank and underpinned by transactions worth about 40 billion pounds a day. the need to transition is a critical one for all involved. we impressed this upon firms in our dear ceo exercise ; a key objective of which was to ensure board level responsibility for transition. and it is key to the www. bankofengland. co. uk / - / media / boe / files / record / 2017 / financial - policy - committee - meeting - september - 2017. pdf www. bankofengland. co. uk / financial - stability - report / 2018 / june - 2018 all speeches are available online at www. bankofengland. co. uk / news / speeches bank ’ s objectives – risk free rate transition is a core part of the bank ’ s strategic goal to catalyse reforms in financial markets to make them fairer and more effective. the good news is, transition is happening. there has been real progress in establishing sonia as the successor to sterling libor. in the past 6 months there have been a number of positive developments in the sterling cash market. from a zero base this time last year, sonia linked floating rate note ( ‘ frn ’ ) issuance now dominates sterling floating rate financials issuance and there is clear momentum towards using the compounded sonia rate across bond markets. the first 5 months of 2019, have seen 21 different banks, sovereigns, and supranationals issue frns referencing compounded sonia, with a total value of about £19bn. we ’ ve also now seen the first move by a bond issuer to switch their outstanding libor linked bond to reference compounded sonia instead. they are currently going through a bondholder consent solicitation process, with the deadline next week. this is a development which is being closely watched. we have also seen the first sonia linked securitisations issued. in other areas, we are seeing progress. one uk firm has announced it has switched the basis of its balance sheet over to sonia. and in otc derivatives, the notional value of cleared sonia swaps is now only slightly less then cleared libor referencing swaps, with sonia starting to dominate at shorter maturities ; but this hasn ’ t materially changed over

and companies can also affect the price - setting and wage formation processes and thereby inflation. one purpose of a clear inflation target and a monetary policy governed by such a target is to firmly establish the inflation target with the general public. at the same time, one should remember that the riksbank is forced to take into account many other factors that influence price trends. these are often non - recurring factors, such as supply shocks in various forms, which are often difficult to predict. but above all it can be difficult to use monetary policy to prevent them having an impact on inflation. monetary policy has an impact with a time lag, and it does not always reach the source of such a price rise. for instance, a central bank cannot prevent oil prices rising in the wake of the concern over a possible war in the middle east. on the other hand, a central bank could of course try to quickly tighten demand in the country to push down prices in other areas and thus ensure the average rate of price increase remains in line with the target level. the focus on inflation 1 - 2 years ahead, entails monetary policy being conducted gradually, little by little, rather than a constant acceleration and braking, which would risk creating unnecessary variations in demand and which could in turn have a negative effect on production and employment. the focus on the coming 1 - 2 year period thus means that temporary rises or falls in the inflation rate can be tolerated. however, it is important that the riksbank is clear in its communication of whether it considers the rise to be temporary and when it expects it to subside. one - off shifts in price levels can have a more lasting effect on future inflation if, for instance, those involved do not believe that the rise is temporary, assessing that it will be lasting and thus wishing to compensate for the upturn. if this occurs, monetary policy must be used to intervene, even if the economic situation in itself does not provide cause for concern with regard to inflation, to prevent inflation taking a hold through expectations. the reason for this is quite simply that it is more costly in terms of reduced production and employment to force down inflation expectations once they have become established at a higher level rather than to prevent them rising. parallels between the current situation and 2001 plus 2002 let us take a look at the current situation and begin with the price rises. now, as in spring 2001, inflation has risen as a result of temporary factors pulling up the general level of prices. during 2001 mad - cow