year real interest rate has fallen over recent decades note : ten - year zero coupon yield ( spot interest rate ) computed from uk index - linked government debt. see yield curves. source : bloomberg finance l. p, tradeweb and bank calculations. chart 2 : there has been a trend decline in real interest rates in most countries note : high - income countries include finland, france, italy, japan, netherlands, spain, the united kingdom and the united states. see appendix a. 2 to bailey et al. ( 2022 ) for data definitions. source : authors ’ calculations using eu klems, the penn world table 10. 0 and the jorda et al. ( 2017 ) macrohistory database. see appendix a. 1 to bailey et al. ( 2022 ) for more details. this pattern is suggestive of a structural trend in the underlying global trend real interest rate, in other words global r *. this concept can be estimated, using a variety of statistical methods, all of which extract an underlying slow - moving trend from the more volatile data. some of these estimates, from a range of different academic papers, are shown in chart 3. the teal line shows a new estimate by bank staff, based on data for 31 high - income countries. though there are relatively wide error bands around this central estimate, and alternative estimates from the literature exhibit different patterns, the direction of travel has been clear. in other words, a decline in global r * over recent decades is common across estimates. chart 3 : empirical measures of global r * have fallen in recent decades source : consumer prices indices, short - term interest rates and government bond yields for the calculation of cesa - bianchi et al. ( 2022 ) ’ s global measure of r * from the jorda et al. ( 2017 ) macrohistory database and eikon refinitiv. other estimates from del negro et al. ( 2019 ), hamilton et al. ( 2016 ), holston et al. ( 2017 ). while these statistical estimates help us to understand the dynamics of the trend real rate, they do not tell us why it has been falling. the dynamics of the trend real rate are determined by slowmoving structural factors that affect the balance between the demand for capital for production and the stock of wealth available to finance it. [ 6 ] understanding the underlying structural trends that drive this balance requires a structural model. recent research by staff at the bank has developed a

one - off exercise. we need continuous engagement so that market infrastructure keeps pace with market innovation. that ’ s why the bank is announcing that it will hold an open forum this autumn which will bring together all stakeholders in ficc markets. our goal is to discuss the prospects for market functioning, where regulations might overlap or conflict, and whether enough has been done to build the real markets the uk deserves. to prompt an open discussion, we are publishing a detailed paper which reviews these issues and draws out such questions. 5 everyone has an interest in the future of financial markets, so i would strongly encourage you to engage with our open forum process online and at the conference itself. an open and accountable bank welcomes your input. our response to recent failings should be as ambitious as those of our predecessors to the great fire : renewed prosperity built on private markets and public market infrastructure. let our legacy be the earthly equivalent of wren ’ s ethereal genius, real markets so that the city can do what it does best : transact and innovate for the good of the people of the united kingdom and the world. thank you. see http : / / www. bankofengland. co. uk / markets / pages / openforum. aspx. bis central bankers ’ speeches