Firms and households could benefit from a growing number of financial products and services, lower prices and faster provision. The problem, however, would be that banking services would likely migrate towards the lessregulated parts of the financial system where many fintechs – as non-deposit takers – still operate.12 This is what Charles Goodhart coined the “boundary problem”13 of financial regulation.
As usual, the reasons for our decision were set out in the statement issued shortly after the meeting. I don’t propose to run through all the issues that were considered by the Board. But there are two issues that I would like to talk about. The first is the improvement in the global economy.