Before they do so, a good leader assesses the context in which their organisation operates. That process starts with discussions with all stakeholders, including clients, senior managers and, via roundtables and surveys, colleagues at all levels. Understanding context requires developing intuitions about global developments and shifting technologies. This has always been second nature to central banking, but there are few organisations today that are not affected by the mega trends of shifting demographics, the accelerating pace of technological disruption and the search for a more inclusive capitalism. When setting priorities, time is of the essence because of both the rapid pace of global change and the arc of a leader’s personal capital within their organisation. As the global head of McKinsey Dominic Barton observes, “Great leaders set a clear agenda early on and then act on it fast. They never have as much power or impact as when they first take on the role.”  5  4  This is part of the Bank’s Vision 2020 Strategic Plan launched in 2017, which aims to overhaul ‘how we work’ and ‘how we communicate’. See: https://www.bankofengland.co.uk/about/governance-and-funding 5 Barton, D (2017) p. 3 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  The third thing leaders do is to catalyse action. Specific catalysts vary with an organisation’s structure and culture, but in all cases they require the full and visible commitment of the leader before devolving power to colleagues.
On this basis, it can decide to transfer to direct supervision any bank or group of banks that may be considered relevant or the origin of systemic risk. This incorporates the lesson of the crisis that not only big banks can be the source of general financial instability. The SSM’s micro-prudential role will also be complemented by extensive macro-prudential powers. Unifying micro- and macro-prudential powers within the central bank aligns practice in the euro area with that in most other advanced economies. The Bank of England, for instance, will have the Prudential Regulation Authority for micro- and the Financial Policy Committee for macro-prudential issues. And there are in fact additional reasons for doing this in a multi-country monetary union like the euro area, as the level of the main interest rate may not be appropriate for all countries at all times, meaning macro-prudential tools play an important role as a “counter-weight”. A final point to note about the SSM, according to its Regulation, is that its launch will be associated with a comprehensive review of participating banks’ balance sheets. The objective of this review is to identify legacy problems and start with a system that avoids reputational risks for the SSM down the line. This process may have financial implications if impaired assets have to be written down. And this is a further reason why having a Single Resolution Mechanism in place for participating countries is a matter of urgency.