There is one other arena where clearer rules of the game would be of great value - the Commercial Court. After 13 years, we have at last drawn a line under the BCCI case, the most expensive fishing expedition in history. It ended as a comprehensive victory for the Bank, both on the substance of the case and on costs. The trial set new records - the longest opening speech in English legal history, an even longer reply, and almost certainly the most expensive commercial litigation ever. It is for others to comment on the behaviour of those who brought a case that even they described as a blood sport. I can presume only that they were allowed to play within the rules of the game. In which case, it is the rules of the game that should be questioned. A legal framework for enforcing contracts and resolving disputes is not just an arcane process which allows professionals to earn vast fees, but an integral part of the infrastructure of a successful market  2  BIS Review 61/2006  economy. It matters that there are simple, clear and timely ways of resolving disputes. What the BCCI case revealed was a legal system incapable of guaranteeing that. How can a case described by the trial judge himself as built “not even on sand but on air” take thirteen years and over £ million in costs to come to a conclusion?
For many years, the Bank operated several times a day in  BIS Review 61/2006  1  the money markets, but that hyperactive approach did not succeed in stabilising the overnight interest rate which remained more volatile than in most other advanced countries. It was important to move to a simpler system in order to reduce that volatility, and the new system of money market operations, which was introduced last month, has done precisely that. The Bank now deals in the markets only once a week. Almost all banks and building societies now have access to the Bank. And they no longer have to balance their books with us at the close of business every day, but instead must achieve a target balance with us on average over the month running between MPC meetings. For the first time in its history, the Bank pays interest on reserve balances held by the commercial banks with us. The rate paid by the Bank on those reserve balances is the rate set by the MPC - Bank Rate is back. Great credit is due to the teams led by Andrew Bailey and Paul Tucker who together managed the introduction of the new system, proving that, as Cameron Cobbold remarked in 1958, “the Bank is a bank, not a study group”. The 1997 reforms also changed the rules of the game for communication between the Bank and financial markets, and I would like to say a word about what they are.