Such an approach would be a recipe for a regulatory framework that’s well-crafted, detailed and intricate... …but ultimately, irrelevant. Regulation of finance is a means, not an end. So it makes much more sense to define the outcome that regulation should achieve and to give regulators the tools to achieve it. Then they can be held to account for doing whatever it takes to deliver that outcome, even as circumstances change. The EU has, however, taken the first approach, putting a large body of rules in the equivalent of primary legislation. Those rules are inflexible and slow to respond as times change. As my colleague Sam Woods has argued, this approach follows from a goal of harmonising regulation across 28 countries.7 Given that, it would be an odd approach to follow outside the EU. And few non-EU countries have. Indeed, even as a member of the EU, the UK has taken the second, very different, approach. By tasking us with promoting a financial system that serves households and businesses in bad times as well as good, it overlaid EU rules with an outcome to be pursued. 7  See speech by Sam Woods (May 2019): ‘Stylish regulation‘. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  And that outcome is what the UK Parliament holds us to account for delivering, even as times change. That has given us the freedom and responsibility to move regulation with the times; to be agile. It’s a responsibility we take seriously.
That’s why, as we review the issues with open-ended funds, we intend to have in mind not just how reform could promote financial stability, but also how it can promote the supply of productive finance too. Because we all want not just stability in our financial system, but opportunity from it too. Conclusion  We all want a financial system that serves the economy in bad times and good. It’s an ambitious outcome that we’ve been tasked with promoting. But it’s an outcome that households and businesses deserve. They didn’t get what they deserved before the financial crisis and certainly didn’t get what they deserved in the crisis. Instead they saw opportunity constrained and the economy crunched. Now, after a decade of reform, the core of the system is, or is being made, resilient to a wide range of challenges it might face. And with that, opportunities have, or are being, unlocked for finance to better serve the economy. It would be contrary to our mandate and costly to the economy if we were to row back on those reforms. Our focus is instead on the future. On sustaining a financial system that serves in bad times and good; a system offering stability and opportunity. To sustain that in a changing world and changing financial system, we don’t need more or fixed rules. We need agility. Agility to respond to new challenges and ensure stability. And agility to open up new opportunity.