The Bank did this by: setting up a senior level Steering  4  Summarised in http://www.bankofengland.co.uk/archive/Documents/historicpubs/qb/1995/qb950107.pdf. 5  Today, the standard settlement times in CREST are T+2 for equities and T+1 for gilts. 4  BIS central bankers’ speeches  Committee to oversee the development of the design; forming many working-level working groups and consulting on all major design decisions; and ensuring that the industry bore the cost of the overall project. The Steering Committee was for making decisions and knocking heads together. According to a “senior banker” quoted by the Independent newspaper, Pen Kent (as Chair) and Iain Saville (as Chief Executive) were a “Mr Nice and Mr Nasty’ duo … bludgeoning the vested interests which sank TAURUS into submission” 6. The consultations were voluminous, had short turn-rounds (some as little as two weeks), and respondents received personalised replies (much to their initial surprise): a strategy christened “choking the cat with cream”. And the financial commitment sought by the Bank was broad-based: when CRESTCo was first established, 69 institutions were asked to subscribe £ in share capital, giving them skin in the game from the start. Second, the project team committed to an approach to building CREST that was simple, focused and open: in the design of the system itself, and in the composition and work practices of the project team. From the start, the November 1993 “Green Book” set out a deliberately minimal blueprint, excluding non-critical functions required only by a few, or which could be performed by users in their own systems.
This approach was consciously at odds with that adopted for TAURUS, which had tried to be all things to all people 7. But it also focused minds in the industry, forcing them to make difficult tradeoffs, and creating a clear incentive to market providers to produce “add ons” for extra user functions. The project team itself projected a similarly minimalist, open approach in its work – building on their own past experience of having developed the Bank’s system for dematerialised settlement of gilts (the “Central Gilts Office”), involving a full range of disciplines (including policy, IT and legal) in all outreach and design meetings, and embracing a robust attitude to analysis and self-criticism, perhaps best summed up in their T-shirt logo “Purist and Bloody-Minded”. Not everything went to plan. Some early project management structures were found wanting. PWC’s audit of the project in Spring 1994 identified what might be euphemistically termed “a range of unfinished business”, but allowed the project to go forward. And the early months of operation after that launch day in July 1996 faced technological challenges and setbacks. But it is remarkable to think that this basic approach delivered a system that, at its core, remains with us twenty years later. How has the Bank applied the lessons from the building of CREST to the strategic renewal of RTGS?