##p, harnessing the efforts of both official and private sectors. its destination is a single, global lei standard. as announced last week, significant progress is being made across five fronts : governance, operational model, scope and access, funding and implementation and phasing. 30 the fsb will present its lei recommendations to the next g20 summit in june 2012. creating a pi for finance is altogether more complex. finance is in the pre - barcode era for retail products or the pre - web era of the internet. but enough work has already been done to demonstrate that pis are feasible. as long ago as 1997, the international organization for standardization ( iso ) released a standard for the classification of financial instruments ( iso 10962 ) and designated the association of national numbering agencies ( anna ) as the registration body for this standard. 31 more recently, following g20 commitments, the industry has been working to standardise classification of otc derivative products. the international swaps and derivatives association ( isda ) is working with derivatives clearing houses and other financial institutions to use financial product mark - up language ( fpml ), which is already used in the industry for communications and processes, to provide a standardised presentation of each listed or cleared product. isda published the latest version of its otc taxonomies in march 2012. 32 sifma is backing the use of fpml. at a greater level of granularity still, lexifi is selling a commercial programming language, mlfi, which breaks down financial transactions into their primitive constituents. these elements can be combined using a standardised syntax to describe instruments at any level of complexity. in essence, this approach is an attempt to create a “ dna string ” for derivatives. as yet, we are some distance from having a consistent global method for financial product identification. the prize beyond that, a big one, would be to integrate leis and pis using a commonly - agreed global syntax - an html for finance. this would allow us to move from words to sentences. it would provide an agreed linguistic base for a common financial language. provided this language is flexible enough, like gs1 standards or html, it ought to be capable of describing any instrument whatever their underlying complexity. once developed, maintaining and updating this common language and syntax is likely to need some global governance body to act as guardian. this is akin to the role played by gs1 and w3c for supply chains and web standards. the success

wholesalers and retailers. this lengthy supply chain added both risk and cost. it also created a significant barrier to entry for new authors who were reliant on publishers to get their physical books onto physical shelves. digital publishing and distribution has fundamentally changed this market. both the books and the shelves are now electronic. authors can now format books for e - readers in a couple of hours. sales platforms like amazon kindle direct give access to a worldwide audience with essentially no upfront costs. supply can close to perfectly match demand as the marginal cost of creating and delivering an ebook is effectively zero. this digital revolution has caused barriers to entry to plummet while simultaneously raising returns to author entry : they now receive as much as 85 % of the royalties from an ebook, compared to as little as 10 % from a physical book. previously unpublished authors now sell millions of books. the incumbent middle men – book publishers, distributors and retailers – have found their lunch devoured in one sitting. in effect, they have been disintermediated by technology and ( in a delicious irony ) a common language. this pattern has been replicated in the music industry. for half a century or more, the music supply chain was unchanged. new acts were discovered by large record labels who distributed physical goods ( vinyl, tapes or cds ) to retailers for sale to the public. over the past decade, the costs of copying and distributing music have fallen to close to zero. as in publishing, barriers to new artist entry have plummeted. the middle - men – music production companies and distributors – have seen their piece of the pie eaten. and as a direct result of this industrial transformation, the pie itself appears to have grown. studies of the contributors to productivity growth since the 1960s indicate that the two top - performing sectors have been retail and wholesale. 21 this is attributed to improvements in business processes in these sectors – the “ wal - mart effect ”. it is also attributed to wider and faster dissemination of innovation courtesy of new entrants. economist w. brian arthur believes this digitised network of automated processes, linked by a common language, may have put the world on the cusp of a second industrial revolution. 22 arthur describes a “ second economy ” – the digital root system of the physical economy – and predicts it could become larger than the physical economy within a couple of decades. if so, those estimated benefits of a common language – in this case html and gs1 rather than hindi and mandarin – will