Although the US foreign liabilities exceed the assets by over USD 2.5 trillion, the current account income balance of the US in 2005 was positive. This has led  1  As presented by A. Blinder and R. Reis in „Understanding the Greenspan Standard”, presented at the Fed conference in Kansas City in August 2005. (Economic Performance in the Greenspan Era: The Evolution of Events and Ideas). An example of such delays in the possibility of recognising a certain phenomenon is the rapid acceleration of the growth trend in labour productivity in the USA in mid-90s. The former Federal Reserve President Alan Greenspan formulated a thesis that such an acceleration took place in 1995, whereas econometric models where capable to show it only after five years from its occurrence. BIS Review 19/2006  1  to creation of a new hypothesis, according to which the USA exports “dark matter” 2 . It claims that, since the US revenues on foreign assets are higher than the costs of servicing of foreign liabilities, some “other assets” must exist which, being measured incorrectly in the statistics, affect the “real” international investment position of the USA, which is not negative. In such a case, the US current account deficits observed in the recent years would be a statistical illusion. The aforementioned concept has stirred a very lively debate and has been forcefully criticised by many economists, including Willem Buiter 3 , a former EBRD chief economist.
The draft standard on risk management for new bond issuances sets out principles to mitigate risks around selection and formation of reference rates. The FMSB’s Statements of Good Practice, such as for surveillance of FX markets, provide more detailed guidance and worked examples to help set expectations. The FMSB is also scanning the horizon for future misconduct risks, including through its innovative behavioural cluster analysis. Rightly, given rapid changes in underlying market structure, this process has prioritised work on vulnerabilities arising from fast automated markets. Will These Standards and Codes Make a Difference? We know from history that codes are of little use if nobody reads, follows or enforces them. Why should the FMSB’s efforts be expected to help reverse the tide of ethical drift? Indeed, given the long history of misconduct, aren’t such efforts akin to King Canute rebuking the waves? 8  I’m more optimistic that the tide will turn because the FMSB is part of a much broader effort by UK authorities and market participants. Together, we have created a comprehensive and mutually reinforcing set of measures that strengthen the hard and soft market infrastructure. The resulting incentives give FMSB standards moral force and practical consequence. First, in the FMSB’s core work, the best in the market are taking responsibility for identifying and codifying best practice, in a way that complements and reinforces existing regulation. The FMSB now convenes senior participants from fifty global issuers, underwriters, asset managers, exchanges, custodians and investment banks.