To most people, $ million may sound like a lot, but given that $ trillion of financial contracts reference U.S. dollar LIBOR, it’s really a drop in the ocean.1 As a result, submissions are largely based on judgment, as opposed to real numbers. When the LIBOR scandal erupted, it became clear that there had been fraud and collusion, both within and across financial services firms, in the pursuit of profit. The reliance on expert judgment, rather than actual data, makes the rate too vulnerable to manipulation. It’s readily apparent to all those in the industry—both firms and regulators—that LIBOR is fundamentally broken. Consequently, banks are increasingly reluctant to provide LIBOR submissions, adding to the level of risk around using the rate. The U.K. Financial Conduct Authority (FCA) has reached an agreement with banks to keep submitting rates through the end of 2021, but in 2022 the existence of LIBOR will no longer be guaranteed. In other words, LIBOR’s survival is assured for only another 901 days. Those in the market know the full scale of the risks this creates for the financial system. LIBOR isn’t just the rate that banks use to borrow from one another—it’s also the underlying rate on numerous derivatives and loan contracts. The $ trillion figure I mentioned earlier is the approximate total exposure to U.S. dollar LIBOR. That’s about 10 times U.S. gross domestic product.
Dear participants The productivity and the quality of work are major determinants of life quality, affecting nutrition, health and education, social protection, and fair treatment. Jobs are particularly important for the poor, whose labour is often their only asset and a primary route to poverty eradication. It is for this reason, that we at the central bank recognise skills development as an economic imperative. This is because it increases productivity of economic agents. Chairperson In the aftermath of the recent global financial crisis of 2008, employment has re-emerged as a top priority area across the world. A large and growing young population can be a driver for economic growth and social progress provided they access quality education and health, and are engaged in decent employment, without which, many young people will not be able to escape negative social vices and poverty. In recognition, of the foregoing, the National Budget for 2013 whose theme is; “Delivering Inclusive Development and Social Justice” has for the first time put job creation at the centre of its development agenda by explicitly targeting the creation of 200,000 jobs in 2013. BIS central bankers’ speeches  1  Sectors targeted for these jobs are agriculture, tourism, manufacturing and construction (including infrastructure). Ladies and gentlemen Sustained efforts to bring in private investment coupled with supportive public policies and investment, would contribute to enhancing productive capacities and generating the much needed jobs in our country.