And all these dynamics have been taking place in an era of digitalisation and rapid development of new technologies, in which massive information flows call for an internationally agreed response that allows the benefits of innovation to be reaped while ensuring that the potential risks are mitigated. Together, these developments amount to a new policy frontier that requires the promotion of mutual understanding and broad coordinated policy efforts, in much the same way as when the world first confronted the problem of managing increased trade and financial flows. However, this need for further coordination comes at a time when inward-looking populist and protectionist policies have re-emerged in some countries in combination with a greater emphasis on bilateral relations, somewhat questioning the current multilateral rules-based framework. I am certain that all these topics will feature highly in our discussions over the next two days. But before opening the full conference, allow me to start by recalling the underpinnings of the Bretton Woods agreements, the economic benefits they have facilitated and the limitations that have become apparent over the years. I would then like to discuss why reforms are key to the survival of multilateralism, with some ideas for a way forward to tackle current challenges in an increasingly interconnected and digitalised global economy. The benefits of multilateralism The Bretton Woods agreements of 1944 were the cooperative response to the unilateral actions taken in the early 1930s that led to a period of historic global economic contraction.
David Rule: Regulatory reform, its possible market consequences and the case of securities financing Speech by Mr David Rule, Executive Director for Prudential Policy of the Bank of England, at the Federal Reserve Bank of Chicago Annual International Banking Conference, Chicago, 6 November 2014. *  *  *  The financial crisis revealed fundamental weaknesses in pre-crisis bank regulation. The regulatory response internationally has been broad and deep. Whereas before the crisis, regulators struggled to keep up with financial markets innovation, since the crisis banks have struggled to keep up with regulatory innovation. That may continue for another year or so as reforms are finalised and implemented. But the broad shape of the new bank regulatory regime is now clear. And, as regulators, we should prepare for a period in which market innovation is likely to increase again – both the good kind that improves services for customers and the more ambiguous kind in which firms adjust their activities in response to regulatory constraints. We need to follow these adjustments closely in order to understand the overall effect of regulatory change on banks and financial stability, and to identify, and where appropriate address, any unintended consequences. I would like to use this time to explore some of the possible effects, and focus on securities financing transactions as one area where tougher regulation is both needed but might have wider consequences.