guy debelle : the global code of conduct for the foreign exchange market speech by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the fx week asia conference, singapore, 31 august 2016. * * * thank you for having me here today to talk about the global code of conduct for the foreign exchange market. as you may know, phase 1 of the code was launched in new york in late may. 1 today i will reiterate the motivation for the work we are doing on the global code, then update you on where we are at with the process and outline the way forward. why is the work going on? as i have stated on previous occasions, the foreign exchange ( fx ) industry is suffering from a lack of trust in its functioning. this lack of trust is evident both between participants in the market, but at least as importantly, between the public and the market. the market needs to move toward a more favourable and desirable location, and allow participants to have much greater confidence that the market is functioning appropriately. a well - functioning foreign exchange market is very much in the interest of all market participants. this clearly includes central banks, both in their own role as market participants but also as the exchange rate is an important channel of monetary policy transmission. in a globalised world, the foreign exchange market is one of the most vital parts of the financial plumbing. the global code sets out global principles of good practice in the foreign exchange market to provide a common set of guidance to the market, including in areas where there is a degree of uncertainty about what sort of practices are acceptable, and what are not. this should help to restore confidence and promote the effective functioning of the wholesale fx market. to that end, one of the guiding principles underpinning our work is that the code should promote a robust, fair, liquid, open, and transparent market. a diverse set of buyers and sellers, supported by resilient infrastructure, should be able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour. the work to develop the global code commenced in may last year, when the bank for international settlements ( bis ) governors commissioned a working group of the markets committee of the bis to facilitate the establishment of a single global code of conduct for the wholesale fx market and to come up with mechanisms to promote greater adherence to the code. 2 there are two important points worth highlighting :

nearly $ 15 billion in the june quarter. in addition, businesses received more than $ 30 billion in jobkeeper payments to support the wages of their staff. these payments are equivalent to around 15 per cent of total household disposable income in a typical quarter. many households have used this extra income and their increased savings to put their balance sheets on a firmer footing. some of the money withdrawn from superannuation funds under the early release scheme – which is now equivalent to about an additional 10 per cent of quarterly household disposable income – has also been used to pay down debt and strengthen cash buffers. the impact of this can be seen in some of the banking data. over recent months, there have been record rates of repayment on personal credit cards and other forms of personal debt ( graph 8 ). interest - bearing credit card balances have fallen by 22 per cent since march and are now at their lowest level in around 15 years. graph 8 personal credit cards net repayments * $ b $ b * seasonally adjusted source : rba for many people with a mortgage, much of the extra savings and some of the superannuation withdrawals have been used to increase their balances in their offset accounts, with offset balances up 10 per cent since march. other people have simply paid down principal directly. combined, all forms of mortgage payments – including the additional balances in offset accounts – reached a record high over recent months, despite repayments being deferred on around 8 per cent of housing loans ( graph 9 ). graph 9 flows into housing loan and offset accounts * share of disposable income % % interest principal offset * seasonally adjusted and break - adjusted ; lighter bar is an estimate for the september quarter sources : abs ; apra ; rba the question that all this raises is : what are people going to do with this extra saving and improved debt situation? in aggregate, household income is likely to decline in the december quarter as the unemployment rate increases and government support becomes more targeted. in normal times, a decline in income would be expected to affect consumption, but these are not normal times. it is entirely possible that as restrictions ease, people will choose to draw on their accumulated buffers to sustain and increase their spending. many businesses face a similar choice to households. many have boosted their cash buffers over the past six months and face a decision about what to do with these : sit on these buffers in case something goes wrong