So the recent political agreement on an implementation period is welcome. There was always going to be an interlude between political agreement and legal certainty. So authorities here have done what our mandate to keep the system capable to serving the economy implies. Regulatory underpinning has been given to the political agreement. European firms can assume they’ll be able to operate in – and serve clients in – the UK, much as they do now, until the end of 2020. 5  5  See update on the regulatory approach to preparations for EU withdrawal, 28 March 2018, at https://www.bankofengland.co.uk/news/2018/march/update-on-the-regulatory-approach-to-preparations-for-eu-withdrawal 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  And that commitment is backstopped. The UK government has committed to legislate, if necessary, to allow European firms to operate and serve end users in the UK temporarily after Brexit. The economy of the UK, at least, can be confident that – whatever happens – it can access financial services as it does now. But still more action is needed because existing contracts could be disrupted. Uncleared over-the-counter derivative contracts, with a notional value of £ trillion, could be affected. That’s around a quarter of derivative contracts entered into by parties in both the UK and EU. Novation of contracts on that scale risks disruption, particularly if it were to take place in a short time frame. As with the flow of new services, a backstop would have benefit. It would need two parts.
Five years of macro-prudential: Regulating the Square Mile for all 94,000 square miles Speech given by Alex Brazier, Executive Director for Financial Stability Strategy and Risk, Bank of England  Future of Finance Conference, Imperial College Business School Thursday 19 April 2018  I am grateful to Hugh Burns, Maighread McCloskey, Emma Moriarty, Joe Noss, Varun Paul, Will Saunt and David Seaward for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/speeches  It is now five years since the birth of the UK’s post-crisis reforms to financial regulation. Reforms that brought the ‘twin peaks’ of a conduct supervisor and, for banks and insurance companies (and the largest investment firms), a dedicated prudential supervisor. But the novel addition, atop those twin peaks, was a new macro prudential look-out – the Financial Policy Committee of the Bank of England – that would have real duties and powers. Its duty: to look up and out, from the rules for finance – the Square Mile – to the outcome they deliver for the end users in all 94,000 square miles of the UK. The outcome it seeks: a financial system that serves households and businesses in bad times, as well as good; a system that doesn’t disrupt the economy but still delivers for it. Its power: where the rules don’t do that, change them. 1  2  The addition of the look out to the twin peaks was a recognition of the obvious.