I am delighted to be working with Mark, and he also brings his experience as Chairman of the Financial Stability Board, which is spearheading the work to create simple global capital standards for insurers as a central plank of its work on insurers which are of significance to the financial system. I will say some more on this later. I hear occasionally the charge that the PRA and the Bank lack senior level knowledge and experience in insurance. As I hope you can tell, I don’t accept that argument. The Bank of England has the objective of promoting financial stability by ensuring a more resilient financial system that, inter alia, is able to support the credit creation and asset allocation necessary to build and sustain economic recovery. A more resilient financial system will support that recovery, and by reforming and bringing the Bank’s monetary and financial stability objectives closer together, I can assure you that we are working very hard to use our toolkit to the best advantage. And this includes insurance supervision, where the new arrangements have already brought about a closer understanding of the role of insurers in the transmission of monetary policy, and the issues that arise in a world of sustained very low interest rates and Quantitative Easing. A key part of the new structure of the Bank of England is the Financial Policy Committee. The FPC has the so-called macro-prudential responsibility which has at its heart the resilience of the financial system as a whole.
They made loans to the trusts they judged solvent, but the Knickerbocker Trust, the second-largest in the country, did not make the cut, and its collapse precipitated panic throughout financial markets. To stem that panic, Morgan and his banking colleagues lent more generously to the surviving trusts. 1/4  BIS central bankers' speeches  The consequence of these events was a severe recession, and the U.S. economy contracted more than 10 percent. As a result of the financial sector’s inability to contain recurring financial panics, Congress realized the need for the public sector to step in, a process that led in 1913 to the creation of the Federal Reserve System. An Unprecedented Challenge Returning to more recent events, as the pandemic began to unfold in the U.S., we saw intense strain and disruption to financial markets. In response, the Federal Reserve has taken a set of strong and decisive actions to supply liquidity and to assure the continued flow of credit in the economy.2 The unique nature of this recession—a global pandemic—has required us to design an innovative response. Some of our actions have the hallmarks of those taken during the 2008 financial crisis, but many more have required a fresh approach. As uncertainty about the coronavirus took hold, we saw disruptions in short-term funding markets.