think the message should be pretty obvious. this process of establishing a global code of conduct for the fx market provides an opportunity for the industry to work with the public sector to improve the fx market and restore confidence in it, rather than having a ( possibly sub - optimal ) solution imposed on it. that said, an overall aim of the code is for it to be principles - based rather than rules - based. there are a number of reasons why we intending to proceed in this manner, but from my point of view, an important reason is that the more prescriptive it becomes the easier it is to get around. rules are easier to arbitrage than principles. if it ’ s not expressly prohibited or explicitly discouraged, then it must be ok seems to be the historical experience. the more prescriptive and the more precise the code is, the less people will think about what they are doing. if it ’ s principles - based and less prescriptive, then market participants will have to think about whether their actions are consistent with the principles of the code. the intention is to have this work of developing a single code to replace the various regional industry codes completed by may 2017, with a new framework for adherence completed at the same time. however, we intend to put out some parts of the global code, including drafts of material on order handling and execution, by may 2016. we recognise that there is a need for greater clarity around some of these issues sooner rather later. we will be providing this draft material to the various fxcs and other market participants for their input in the first quarter of next year. at the end of the process, for the code to be effective and for it to achieve what we want it to achieve, it will need to be accepted and endorsed by the fxcs and market participants more generally. that said, the process does not really end, because as the foreign exchange market continues to evolve, the code will need to evolve with it. “ fx benchmarks ”, address to the fx week australia conference, sydney, 12 february 2015. carney, m, “ building real markets for the good of the people ”, mansion house speech, 10 june 2015. available at < http : / / www. bankofengland. co. uk / publications / documents / speeches / 2015 / speech821. pdf >. potter, s. “ trends in foreign exchange markets and the challenges ahead ”, remarks at the 2015 fx week conference, new

zero ( or even slightly below zero ) in many advanced economies to support recovery and assist in balance sheet repair, and they still remain at those levels. in europe, significant institutional reforms are being made to strengthen the stability of the euro area ; these are aimed at getting banking and crisis - management arrangements across the area to function in a more unified way that makes them more robust to shocks in the future. and globally, there is an extensive program of reform underway, for example in banking and securities regulation, to build resilience in our financial systems. australia has been very much a part of that process. a related development in this period is that there has been a renewed interest in more proactive approaches to the management of systemic risk. partly this reflected the lesson from the gfc itself that financial crises are costly, and hence that there is a strong need for better risk management. in keeping with that, institutional arrangements have been strengthened in some jurisdictions to support more proactive risk management by supervisors, where that was found to be lacking. a related point is that, in a low interest rate environment, supervisors have seen a need to be particularly vigilant against a build - up of risk in interest sensitive sectors. a number of them have been taking measures in recent times to respond to developing risks, often focused on property lending. i will have more to say about that later. to summarise ( and oversimplify ) this picture somewhat, the after - effects of the gfc on the global economy have included : reinhart cm and k rogoff ( 2009 ), this time is different : eight centuries of financial folly, princeton university press, princeton. bis central bankers ’ speeches • an extended period of low interest rates • “ search for yield ” behaviour by investors in some interest - sensitive sectors, and • a strengthened focus on risk management by prudential supervisors. recent developments with all of that as background, i want to turn now to our assessment of the evolving risk environment over the past six months, and here i draw on some key messages from our recent review. it is useful to take that subject in three parts : • the global risk environment ; • possible implications of that environment for australia ; and • domestically generated sources of risk. the global risk environment as i have already mentioned, much of the attention from a financial stability point of view over recent years has been on europe. there has been a particular focus on greece, and on potential spillovers from greece to other parts