30  Consistent with this, those on the MPC most worried about the high level of the exchange rate advocated lower, not higher, interest rates in order to bring about a depreciation, at the risk of making the imbalances more acute. 31  The strategy of not raising, and for some lowering, Bank Rate appealed to those who saw signs of an improvement in the supply performance of the economy. BIS central bankers’ speeches  9  Was there a better alternative to a strategy of higher interest rates? The natural first line of defence against financial crises is macro-prudential policy. In principle, such policies can shift the Minsky-Taylor curve closer to the original Taylor curve. With hindsight, before 2007 there should have been a cap on the leverage of banks (see Chart 9). And the cap should have tightened as asset prices increased and the likely exposure to losses increased. That is why we now have a macro-prudential policy regime in the UK. It will be overseen by the Bank of England’s Financial Policy Committee, which will have the power to direct, and make recommendations to, regulators about capital and leverage in the UK financial system. In my judgement, the big challenge to monetary policy before the crisis was a serious mis-pricing in long-term interest and exchange rates, and the imbalances that resulted. Much of this was outside the control of UK policy-makers and reflected developments in the world economy.
Financial crimes will occur whenever there is money to be made and for sure criminals and hackers alike will use their best endeavours to penetrate the defence of the cyber world to rob or steal. The strength of the cyber world also lies its main weakness. Hackers can choose to attack customers and financial firms any time and anywhere because the virtual world is highly interconnected. Cyber attacks can take many different forms. A frequently used method is to make phishing attempts to trick customers into divulging their account information and passwords, or to plant malwares into customers’ computers and mobile phones to steal their access credentials. Then the hackers transfer moneys from the victims’ accounts. Sometimes the hackers would do something unusual, such as the recent example in  BIS central bankers’ speeches  1  Hong Kong in which some customers’ bank accounts had been used by hackers to conduct unauthorized stock trading without stealing money from the victims’ accounts. At the bank level, the usual form of attacks would be Distributed Denial of Services (DdoS), whether they are motivated by blackmail, revenge or activism of some sort. There is a worrying trend that this form of attacks is rising very fast in recent years. Cybersecurity fortification initiative 4. Rather than harbouring the hope that you are lucky enough not to be targeted, it is more prudent and productive to take the necessary pre-emptive steps to protect yourself or your customers from cyber attacks.