Of course, that is helpful to – indeed, is a necessary condition for – the maintenance of financial stability. Most obviously, during the current crisis banks chose to more than double their targets for reserves balances with the Bank in the months following August 2007, and we injected the required increase in money into the system. That was necessary to keep overnight rates broadly in line with Bank Rate; and it was also necessary, although not sufficient, to stabilise the short-term money markets and the banking system. But, as the past 18 months or so have demonstrated, contingency plans centred on managing reserves by no means exhaust the range of market operations and facilities available to central banks to reduce the economic costs of severe disruptions to the financial system. While not explicitly directed to managing day-to-day monetary conditions, those wider measures absolutely must, nevertheless, be constructed to be consistent with, and supportive of, monetary policy. Financial stability and commercial banks How best to construct those facilities turns in part on how we think about financial stability, and so I should probably be clear about the definition of financial stability I employ. It is largely to do with money and the role of the banking system in a monetary economy. Monetary policy is, of course, directed to ensuring stability in the value of central bank money relative to goods and services.
As of now such competence resides mostly in big internet platform companies. However, many data subjects have no way to make better use of their own digital footprints, or data about themselves currently scattered in various different platforms, for their own benefit. 12. For example, SMEs are facing the long-standing problem of having limited access to finance. Conventional credit scoring approaches are not particularly favorable to SMEs because they often lack auditable operating data, which large corporates have. This disadvantage hinders not only the growth of SME businesses, but also the stability of our job markets and economic growth. Worse still, the blow of the pandemic has put the survival of many SMEs at stake, and their need for financing is stronger than ever. So is there a way to better empower data subjects to make better use of their own data for their own benefit? 13. With this objective in mind, we are expanding our financial infrastructure to enable data to take the centre stage. Our recently launched initiative, the Commercial Data Interchange (CDI), is a centralized platform which allows data owners to share their digital footprints voluntarily with banks through data providers in an efficient and secure manner. With a more substantial body of up-to-date and authenticated data shared by SMEs (such as monthly or even daily trading and turnover statistics), banks could use data analytics to perform more accurate credit assessments, and then provide more tailored services to SMEs.