Our levers are the hard and soft infrastructure that we control:   Our hard infrastructure, such as access to our balance sheet and access to our Real-Time Gross Settlement (RTGS) system, the heart of the UK payments system.   And our soft infrastructure, such as our rules, regulations and standards. In this spirit, last year at Mansion House I announced that Huw van Steenis would lead a review of the future of the UK financial system, including recommendations for how the Bank could best support innovation while continuing to promote resilience.1 I would like to thank Huw and the Bank of England team, who over the past nine months have met 300 entrepreneurs, investors, consumer groups, charities, business leaders and policymakers across the country and around the world to produce an excellent report. Today, we published Huw’s recommendations and the Bank of England’s response.2 And tonight, I would like to focus on a few of the actions that the Bank will take to enable the new economy; to ensure the resilience of the financial system; and to support the UK’s transition to a carbon-neutral economy. 1  Carney, M (June 2018) ‘New Economy, New Finance, New Bank’ speech given at Mansion House. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  First, to enable the digital economy The very nature of commerce is changing. Last year, one fifth of all sales in the UK were online.3 Next year, it will be one quarter.
It would help avoid lock-in on existing platforms and enable providers of finance to compete for SME lending, helping to broaden the products available to companies and offer more competitive rates, making access to finance quick, easy and cost effective.20 It is not for the Bank of England to build this platform but we can help lay some of groundwork. The messaging standards we are adopting in the new RTGS will also include tagging payments with a unique ID called a Legal Entity Identifier (LEI).21 This will be mandated for financial institutions and as a next step we are considering how to extend this to corporate payments. That could mean that the payment data sent via CHAPS of non-financial firms could be made available for inclusion in a portable credit file. The LEI could  See: Furman, J ‘Unlocking digital competition’ Report of the digital competition expert panel (March 2019). See: https://www.bankofengland.co.uk/research/future-finance. The introduction of Legal Entity Identifiers (LEIs) will enable consistent and accurate identification of legal entities on a global basis. Their introduction was pioneered by the Financial Stability Board (FSB) following the financial crisis as a means of precisely identifying counterparty risks and exposures. The LEI is linked to a publically available database about each registered entity. LEIs are not yet widely used in payments or supply chains. Following a consultation, the Bank is making LEIs mandatory for all payments initiated between financial entities.