which the market makes a trade, and in circumstances when a fair value is needed, but there is no trade. the value may be needed for accounting and reporting purposes, as for example when assets have to be booked at market value, or it may be needed as a reference price for other transactions, as was the case with libor. unless there is official intervention at this point, or unless a market leader emerges with sufficient power to impose their will, no settled price may emerge. in the latter case, when a price is imposed through market dominance, traded values may not be considered fair. so, is it not possible to determine what is a fair trade, if the product price fluctuates a great deal? it is possible to arrive at a fair price, but only with official intervention. left to its own devices, the market will continue to flounder, and agents on the buying or selling side will object that the price at which they are obliged to trade is unfair. these circumstances warrant aggressive and credible official intervention, sufficient to establish a benchmark for values, determined on a basis which is fully explained, and which is consistent with market understanding of the fundamentals that drive that particular market, as well as being sensitive to production costs and market demand for the product. official intervention has gotten a bad rap in recent policy discussion, often because the policy has not been fully understood, is not in line with market sentiment, or is based on economic assumptions that are unrealistic. however, official intervention which is in line with economic fundamentals, which is fully explained, and which takes full account of the intentions, motives and resources of market participants, may be the only way of attaining a fair value in trade, in circumstances where there is no established norm for prices, or where there has been a large departure from the norm. bis central bankers ’ speeches i will conclude by applying this approach to some of the examples i have cited in this essay. in the case of libor, my view is that the bank of england needs to set a benchmark rate, on the basis of a full analysis and documentation of the underlying market liquidity situation used to justify that rate, and invite banks to use that as their reference rate for international transactions, should they choose to do so. no unofficial financial institution in london has the wealth of data and analytical resources to take an informed view of the real costs of liquidity, comparable to what the bank of england may deploy. the bankers ’

relative development of our business and financial markets, local internet penetration and international connectivity. the quality of life in barbados is high, attested to by the human development report, published by the united nations development programme ( undp ). in recent reports barbados is credited with high human development, an indication that in terms of what our salaries will buy, as well as educational and health status, barbadians live as well as people do in some advanced countries. we have all but eliminated dilapidation in housing, access to electricity, water and sanitation is universal, and homelessness has been reduced to a level that many rich countries would envy. we have our very wealthy, and our poor people, but on the whole we are a remarkably egalitarian society. our economic performance the barbados economy runs on foreign exchange, as i have often said. we live quite well, by international standards, by selling the goods and services we produce at competitive prices for bis central bankers ’ speeches foreign currency, and using that foreign currency to import everything we need for our modern lifestyles. our main focus is therefore always on the activities that earn us foreign exchange : tourism and related activities, international business and financial services, and rum, chemicals and a few other manufactured goods. there is one sector where we have the potential to increase output without the use of foreign exchange, and it is in the energy sector. every day in barbados we produce far more energy than we could possibly use, but almost all of it is completely wasted, because it is in the form of heat generated on our roofs and other surfaces that absorb and reflect the sun ’ s rays. we currently harvest a small amount to heat water. however, affordable photovoltaic systems now provide an opportunity to businesses and middle class households to generate all their electricity needs. of course, we would need a means of supplying electricity at night. it has been shown that with a combination of solar and wind energy, plus biofuels and storage, barbados could become self - sufficient in electricity generation. it is an opportunity we cannot afford to pass up. barbados ’ tourism is rising to the challenges of the 21st century. the barbados brand is highly regarded, and developments in the sector have largely enhanced the quality and appeal of the barbadian tourism product. the visitor experience has been enhanced by top quality sports, dining, shopping, music, culture and heritage. our visitors are in search of authentic experiences, and we continue to enrich our offerings in ways that are