guy debelle : benchmarks speech by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the bloomberg summit, sydney, 18 november 2015. * * * thanks to ellis connolly and matt boge, both for their help in putting this speech together, but also for their significant contributions to the domestic and global work on benchmark reforms. today i am going to talk about benchmark rates, in both fixed income and foreign exchange. this is an issue that might seem arcane to some, but like jonathan richman, “ i keep my place in the arcane ”. benchmarks are very much at the heart of the plumbing of the financial system. indeed, every investor with any global or fixed income exposure is almost certainly investing in a product that uses a benchmark rate, even if they don ’ t know it. after having been taken for granted for many years, benchmark rates have well and truly come into the public domain in recent years with headline - generating legal cases and multi - billion dollar fines. they have also attracted considerable regulatory scrutiny and reform to redress some of their deficiencies which made them vulnerable to abuse. participating in this global reform of benchmark rates has been my night job for the past couple of years and it is these reforms that i wish to talk about today. as participants in financial markets, it is important that you have some understanding about what these reforms are endeavouring to achieve. i will talk first about benchmark reform in foreign exchange and also mention briefly the work on developing a single code of conduct for the foreign exchange market. then i will talk about interest rate benchmarks, focussing on domestic reforms around the principal interest rate benchmark in australia, the bank bill swap rate, consideration of a “ risk - free ” interest rate for the domestic market and briefly some ( small ) changes to the calculation of the cash rate, the reserve bank ’ s operational target for monetary policy. fx benchmarks i will start with foreign exchange ( fx ) benchmarks. why should you care about these benchmarks? for starters you might have a contract which explicitly references a particular fx benchmark. but probably more likely, if you invest in any sort of global portfolio, be it in fixed income or equity, it is highly likely that the portfolio uses an fx benchmark to weight the components across different markets, generally the london 4pm set of foreign exchange benchmarks calculated by the wm company. moreover, as the portfolio

, “ demographics, productivity and innovation ”, speech to the sydney institute, sydney, 12 march. bis central bankers ’ speeches longer working lives not only are we living longer, but life spans are also generally healthier than in the past. 10 among other things, this provides the option of working productively later into life. let me be clear though, extra years of work need not imply less years in retirement. ( i ’ ll come back to this point in a minute ). also, many ( though by no means all ) jobs are less taxing on peoples ’ bodies than in the past. this makes it easier to spend extra years of life in the work force, which is already happening to some extent. many types of workers have been retiring a little bit later in life over recent years and participation rates among older people have been rising over a long period of time ( table 1 and graph 5 ). 11, 12 not surprisingly though, this change is not generally evident for those with very taxing jobs, such as labourers who tend to retire several years earlier than other workers. greater opportunities for part - time work have helped to contribute to rising participation rates among older people. changing social norms more generally – particularly for women – have also made a contribution to rising labour force participation. for a discussion of this point see productivity commission ( 2013 ), kulish m, c kent and k smith ( 2010 ), “ aging, retirement, and savings : a general equilibrium analysis ”, b. e. journal of macroeconomics, vol. 10, no. 1, and the references therein. the recent cyclical weakness in the demand for labour seems to have put paid to the trend rise in participation rates among older members of the population seen over recent decades. but the response to rising longevity ( and other forces ) might reassert itself when demand for labour strengthens. see kent ( 2014 ). there is a possibility that the changes over time shown in table 1 were driven in part by a temporary response to the decline in wealth associated with the global financial crisis. that is, people who might have otherwise retired decided to stay on at work, and for others to re - enter the workforce, to make up for declines to wealth following declines in housing and equity prices following the financial crisis. however, patterns across different workers over the intervening years ( including data for 2008 and 2010, not shown ), combined with the longerterm rise in participation of older ages in graph 5 suggests