Data from the Bank’s sterling money market data collection showed that in the first quarter of this year there were on average only 9 deposits a day underpinning 6 month sterling Libor, with a total daily value of £ million. This lack of transactions means that panel banks have to use their expert judgement to make their submissions. And this means they have become increasingly uncomfortable about doing so. And if those panel banks stop submitting, there is no Libor benchmark. Given the pervasive use of Libor historically, this creates a fragility at the heart of markets – that financial markets are reliant upon an unsustainable piece of infrastructure1. This financial stability risk is something the Financial Policy Committee has therefore been closely monitoring.2  The FCA has secured a breathing space to enable the transition, but only until end-2021. The best way to make the most of the timetable set for Libor to end is for markets to focus on transitioning away from it, to new risk free rates. For sterling markets, to the new risk free rate is SONIA, an overnight benchmark provided by the Bank and underpinned by transactions worth about 40 billion pounds a day. The need to transition is a critical one for all involved. We impressed this upon firms in our Dear CEO exercise; a key objective of which was to ensure Board level responsibility for transition.
Even if there are no unequivocal solutions, some measures are valid for several countries: raising the retirement age, eliminating early retirement incentives, reduction in replacement rates, integrating public pensions within a system which allows future payments to be financed so that the ageing of the population does not create imbalances between generations. Should men and women retire at the same age? This is a sensitive and important issue triggering a whole host of reactions and different points of view. Apparently, in accordance with current jurisprudence, I would say they should retire at the same age, as the European Court of Justice maintains that there should be no discrimination or distinction between men and women in any area. How urgent is pension reform? Extremely urgent, in all euro area countries. When we look at demographic trends, we tend to put it off as we are talking about long-term developments. It seems that the movement is slow and long, and that there is time. However, it is a complete illusion because it is an issue that has to be tackled as early as possible. The more radical left-wing and the unions are opposed to it and say that you are technocrats who only pay attention to numbers. As an important international leader, do you not believe that there are also social costs which need to be taken into consideration? We are, after all, talking about millions of people and all the weakest categories of the population. It is a crucial factor.