##iliency service ( mirs ) – that will act as virtual third site for the bank on an independent it platform. moreover, because swift would operate mirs from one of its european operating centres, it would not be affected by it failure affecting both of our locations, increasing the degree of latency that mirs will offer compared to a traditional model for a third site. mirs will be available from january 2014, and we are the first central bank to take advantage of it. the bank ’ s costs in relation to this project have been funded by the chaps member banks, who will benefit from the additional resilience mirs will provide. bis central bankers ’ speeches turning to the lesson that ‘ liquidity matters ’, we introduced a liquidity saving mechanism ( lsm ) in april this year. there are some technical similarities to the canadian “ jumbo algorithm ”, which periodically looks to offset high - value ( “ jumbo ” ) payments in bilateral queues, speeding up their settlement and reducing collateral requirements. the lsm in our rtgs system is an offsetting mechanism that seeks to match groups of payments, regardless of size, via bilateral and multilateral algorithms that run in short cycles around 275 times each day. all the payments matched by the algorithms will settle individually and simultaneously at the conclusion of the matching cycle. since the implementation of our lsm, participants ’ average peak intraday usage in chaps has fallen by around 20 %, so this innovation has provided a technical means of saving liquidity, reducing incentives to otherwise adopt receipt - reactive behaviour. on - going and future priorities if the post - crisis initiatives i have discussed so far have been, or are, close to completion, one area of work where we have further to go is in ensuring continuity of access to payment services for banks that are in recovery or resolution. in the uk ’ s case, a new resolution regime was introduced in the banking act of 2009 which gave the uk authorities tools to address the risks of discontinuity. nevertheless there is a good case that the effective statutory framework could be usefully supported by private sector initiatives ( whether contractual or otherwise ) to enhance further the ability of central banks, supervisors and resolution authorities to maintain continuity in payment, clearing and settlement services in recovery and resolution. for banks in recovery, that would involve avoiding “ cliff - edges ” in contracts that automatically exclude banks from payment schemes in the event of ( say ) a ratings downgrade. for banks entering resolution,

transformed demand and supply conditions across the globe : the integration of china, india and other emerging market economies into the world trading system. the first signpost shows that prices of labour - intensive manufactured goods have fallen. china, india and the former soviet union between them have massively increased the supply of labour available to industry around the world. as labour - intensive goods have become more abundant, they have also become cheaper. the signpost points us in a familiar direction : the need to change what we produce. were we still producing the same labour - intensive goods as before, with output concentrated in industries like agriculture ( including hops ), textiles, coal - mining and ship - building, we too would have seen the price of our own output fall, just as it did for hop growers a century ago. instead we allowed output and employment to expand in those industries where we could exploit a comparative advantage. in kent, the expanding sectors include financial services, transport ( with 18 million tons of freight passing through the channel tunnel each year ) the exploitation of life sciences, and higher education ( with five universities in the county ). as consumers, we have benefited from falling prices of goods made in china and elsewhere in asia. between 1995 and 2005, the prices of imported manufactured goods fell by a sixth and, relative to the price of domestically produced output, by no less than a third. so over the past decade we have been able to increase consumption by more than the increase in production. openness to the world economy has resulted in a higher standard of living. the second signpost marks the rise in oil and other commodity prices. rapid growth of production in china, india and other newly integrated economies has led to a substantial rise in the demand for oil and other raw materials. between 1995 and 2004, net imports of oil to china rose by a factor of seven. unlike earlier episodes of high oil prices, which were driven largely by temporary supply constraints, the recent increase in the demand for oil has been reflected in higher prices for future delivery as well as higher spot prices. similar rises are apparent in the market for gas. the signpost marked higher energy prices points us towards ways of using less energy, to alternative energy sources and to new sources of oil production such as the canadian tar sands. the first two signposts point us in the right direction. but the path has not been easy to follow. we have seen movements - in both directions - in inflation, consumer spending and output growth. interest