In addition to these general forces that lead to industrial concentration, there is for financial services the particular importance of market liquidity and the ability to trade efficiently, which depends in turn on a large number of market participants wanting to trade in a particular venue. And the necessary market infrastructure generally has increasing returns to scale. Concentration in financial markets  Financial services concentration has increased with financial globalisation and with the revolution in information technology. There are more financial centres now and the largest have become very large. This may appear puzzling; the death of distance, the ability to interact instantaneously with market participants and end users anywhere in the world should perhaps have led to less not more physical concentration of financial services. One can only assume for financial services the returns to face-to-face contact, to physical proximity and co-location of workers remain high. And it is possible that the information technology revolution has perhaps had the opposite effect of making it more possible for activity that used to happen in more localised markets to benefit from the lower costs, greater efficiency and specialised products of the larger financial centres. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  There is some historical support for this. The development of transatlantic cables, telegraphs and tickers in th  the late 19 century seems to have led to greater not less concentration, perhaps by giving greater access to th  economies of scale.
3/4  BIS - Central bankers' speeches  In any case, we stand ready to adjust all of our instruments within our mandate to ensure that inflation returns to our medium-term target and to preserve the smooth functioning of monetary policy transmission. We are now ready to take your questions. 4/4  BIS - Central bankers' speeches