Making Markets Fair and Effective Dr Minouche Shafik Deputy - PowerPoint PPT Presentation

Department of Economics, Centre for Macroeconomics, Systemic Risk Centre and International Growth Centre public lecture Making Markets Fair and Effective Dr Minouche Shafik Deputy Governor, Bank of England Professor Lord Stern Chair, LSE Suggested hashtag for Twitter users: # LSEBoE

Figure 1 - Global financial assets US$ trillions Corporate bonds 120 Financial companies' bonds 100 Government bonds Nominal world GDP 80 60 40 20 0 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: McKinsey and IMF. Bond values are at end-year, constant 2013 exchange rates, based on a sample of 183 countries.

Figure 2 - Market value of FICC derivatives contracts US$ trillions 35 Other Credit default swaps 30 Commodity contracts Interest rate contracts 25 Foreign exchange contracts 20 15 10 5 0 Jun 98 Jun 00 Jun 02 Jun 04 Jun 06 Jun 08 Jun 10 Jun 12 Source: BIS semiannual survey of OTC derivatives.

Figure 3 – The Review framework Potential source Possible responses by of vulnerability Market Firm Individual Regulator/ Legislator Market microstructure Structure Competition and market discipline Benchmarks Standards of market practice Responsibilities, Conduct governance and incentives Surveillance and penalties

Department of Economics, Centre for Macroeconomics, Systemic Risk Centre and International Growth Centre public lecture Making Markets Fair and Effective Dr Minouche Shafik Deputy Governor, Bank of England Professor Lord Stern Chair, LSE Suggested hashtag for Twitter users: # LSEBoE