to address this problem and in 2012, the g20 endorsed the lei system as a global standard. the objective of the g20 is the “ global adoption of the lei to support authorities and market participants in identifying and managing financial risks ”. since it was introduced, over 1. 5 million entities in over 200 countries have registered for an lei. the lei has seen widespread adoption in several financial markets most notably in the over - the - counter derivatives markets. it is also used increasingly in the issuance of debt and equity securities in jurisdictions. in other areas, the uptake of the lei is less widespread, and the financial stability board ( fsb ) continues to monitor this progress. in line with the g20 recommendations, the fsb is a strong supporter for a broader uptake of the lei. we see many benefits not just from a regulatory perspective. the lei has helped to make the financial system safer. authorities can use it for many different regulatory purposes. they can for example use the lei to monitor financial risk, to keep track of financial entities ’ aggregate risk exposure, for resolution planning. a good example is embedding the lei in the data on derivative contracts reported by trade repositories. this is very helpful in giving supervisors a clear picture of what is going on. the lei has also led to many improvements in the quality of data, and therefore in the quality of data analysis. this opens up possibilities for research and data aggregation. it also improves the accuracy of data reporting, and makes data more internationally comparable. the lei is now being used in international stress tests. it is invaluable in helping to understand interconnectedness. it has improved our understanding of the build - up of risk across multiple jurisdictions. these benefits are not only available to regulators and other authorities. obviously, these advantages are also available to the wider financial industry and academics. looking ahead, i am convinced the lei will play an increasingly important role in anti - money laundering processes. banks in europe are investing heavily in ways to combat illegal money flows. this begins with knowing your customer. the lei not only significantly reduces the time and administrative burden required for customer onboarding. it also ensures firms are able to clearly and unequivocally know their customers, and to keep track of their financial identity. not to mention the role the lei can play in removing unnecessary complexity from business transactions. there are many other benefits. and these will multiply as new applications are discovered and developed. today ’

, both in absolute terms and, more particularly, relative to how things might have turned out. i would like to illustrate this latter point by referring back to a framework i put before the committee a year ago when we met in melbourne. this contained four possible scenarios, which i will recap. the first was : “ a weakening world outlook and an abating of domestic credit and asset market pressures. this would provide a reasonably clear prognosis for monetary policy. in other words, if it were weak internationally, and weak domestically, that would be easy. in the other direction, so too would a combination of a clear strengthening of the world economy and continued domestic buoyancy. that would be easy. a third possible combination, and the most favourable one for australia, would be a firming world economy and an easing in domestic pressures, resulting in more balanced growth for the australian economy. but the combination that would be most damaging to the australian economy would be if the household sector were to continue putting itself into a more exposed position at the rate it has over the past few years while, at the same time, a further weakening of the world economy was starting to feed through to australian activity and incomes. ” the last - mentioned of these possible outcomes, and the most unfavourable, was a distinct possibility in the middle of last year, but fortunately it did not come to pass. what occurred instead in the second half of last year was the second - mentioned possibility - a strengthening world economy and a continuation of domestic credit and asset market pressures centred on housing. this was the environment in which we decided twice to raise the cash rate. what has happened so far this year - although it took some time to clearly identify it - was the third - mentioned possibility - a transition to a set of conditions in line with a firming in the world economy and an easing in domestic pressures. this was the most favourable outcome and the one most likely to result in a more balanced growth for the australian economy. i outlined this in a speech i gave to macquarie university in april and we spelled it out more fully in our quarterly statement on monetary policy published last month. the fact that conditions began to develop along these lines is also the reason why, after two rate rises in late 2003, we have not seen the need for action on monetary policy in any of our board meetings this year. in short, we have been comfortable with developments - a lot more so than we were for most of last year.