6. see ‘ implementing the fsb principles for sound compensation practices and their implementation standards : fourth progress report ’ at http : / / www. fsb. org / wp - content / uploads / fsb - fourth - progress - report - on - compensation - practices. pdf all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx taken together, these reforms will further strengthen the alignment between risk and reward, and ensure greater accountability for risk management failings over a longer timeframe. complementing “ hard law ” with “ soft law ” the authorities can implement rules and regulations, but they can also play a broader role by promoting good behaviour. the fixed income, currency and commodity ( ficc ) markets are covered by a patchwork of poorly understood codes of conduct and market practices. to address this, the fair and effective markets review recommended the creation of a ficc markets standards board ( fmsb ), with a mandate to : to improve the quality, clarity and market - wide understanding of wholesale ficc trading practices ; produce guidelines, standards and other materials to promote good conduct ; and, undertake horizon scanning by periodically reviewing wholesale ficc markets for emerging risks. the fmsb has already made significant progress in engaging a wide range of market participants, which is a testament to the leadership of elizabeth corley as interim chair and mark yallop who took over as chairman in july. over 50 firms have signed up including 17 g - sibs, some of the largest asset managers in the world, and many corporates and treasurers who are major users of ficc markets. the fmsb has published draft guidance on ‘ reference price transactions in fixed income rates markets ’ and ‘ binary options in commodities markets ’ that members must adhere to on a comply or explain basis ; and other jurisdictions are starting to take note – the australian financial markets associations ’ members have agreed to implement the fmsb ’ s standards and the south african reserve bank has been in touch about setting up its own fmsb equivalent. many global banks are telling us they intend to apply these standards to all their operations. the internationalization of these market standards is critical for creating a level playing field and preventing “ ethical drift ” across different jurisdictions. it is also vital for sustaining public support for open and global financial markets. the fmsb is not self - regulation. the laws and regulations governing conduct apply and will continue to be enforced. but

one of the two main potential economic benefits of the single currency, the other, of course, being the positive effect of nominal exchange rather certainty within the eurozone on trade flows of goods and other, non - financial, services and its impact in more efficient resource allocation. it is also the field in which the uk, through london, has been able to make a positive contribution to the development of the euro even from outside the eurozone. so i do not at all underestimate the contribution that the euro has made, and is making, to improving the efficiency of the eurozone financial systems. but the point i have tried to emphasise this morning is that it is just one important factor among a number of others affecting our financial systems, so that one should not perhaps expect that it would have had a dramatic overall impact – certainly not in so short a period of time. and my message is that there are many other things beyond the introduction of the single currency that we can and should do, whether from inside or outside the eurozone to improve the functioning of our financial systems. nationally, certainly within the uk, apart from continuing to try to find the right balance generally between competition and necessary regulation, we need also – through the authorities and the financial markets working together – to continue working to ensure that the financial system reaches those parts of the economy that are traditionally most difficult to get at, including particularly the encouragement of smaller and medium - sized businesses and new enterprises as well as community development and regeneration. regionally, within europe, as i said earlier, we need to work away at developing the single financial market, pressing on with the financial services action plan. most immediately, in line with the lamfalussy recommendations, we need to address some of the regulatory obstacles to greater integration of securities markets. and we need to encourage the markets to find more efficient solutions to trading, clearing and settlement systems, particularly in securities markets, but also more generally. the main driver in this last context, certainly from the point of view of those who use these systems, is the wish to reduce costs. it is often pointed out that there are thirty plus exchanges in europe and probably at least as many settlement systems – which are linked to a greater, but often to a lesser, degree, which operate under different legal and regulatory regimes and which all incur their own running and development costs. the fragmentation also means that market participants incur indirect costs because it is harder for them to manage their liquidity and