Publication of aggregate results allows the regulator to communicate to the market and the public our view on the resilience of the sector in plausible, narrated stresses, and identify sector-wide risks. This serves our accountability and can enhance confidence in the capacity of the insurance sector as a whole to continue to support the wider economy through provision of essential financial services. We should also think about whether it will be valuable in the longer term not only to give a sector view but a firm-specific view as well. In stress testing the banking system through the annual cyclical scenario (ACS), the Bank publishes the results for the seven participants. The objectives for the ACS test include improving firms’ risk management and enhancing market discipline, with confidence in disclosures contributing  7  See Discussion Paper 'The 2021 biennial exploratory scenario on the financial risks from climate change' (December 2019). 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  positively to access to capital markets. Publication has been helpful in cementing the integrity of the exercise and being part of the regulator’s accountability. These are valuable benefits, and the current consideration of both the future regulatory framework and the review of Solvency II, on which HM Treasury recently published a call for evidence, suggest we should look carefully at both what we are seeking to achieve, why, and how.
Let me again make some observations from my home country:  Norway had a severe banking crisis around 1990. Three of the four largest banks failed and the direct capital injections required were alone more than 3½ per cent of GDP. Just to put this figure into perspective, the 106 billion euros the European banks need for recapitalisation now is less than 1 per cent of GDP in the euro area. Ever since the Norwegian banking crisis in the early 1990s, our banking industry has been regulated more strictly than banks in comparable countries.   For instance, bank capital definitions have been tighter and the financial supervisor has been more actively restricting banking activities.   Another example is that packaging loans into complex financial instruments was in practice not permitted until 2007 when new regulations provided for the issuance of covered bonds. The complex instruments central in the creation of the subprime crisis were never introduced, and Norwegian banks did not invest in them. Our GDP growth rates have still been high during the years up to 2008, also outside the petroleum sector. And the downturn we experienced in 2009 was modest in relation to comparable countries. At the early stage of the banking crisis in the1990s, the Norwegian central bank provided a large liquidity loan to a savings bank. It soon became clear that the loan would not be paid  2  BIS central bankers’ speeches  back. A liquidity problem turned into a problem of solvency.