Unless we are convinced, as I say, in general or in any particular case, that Beauty will in fact end up with Prince Charming, and not be condemned to long-term cohabitation with the Beast, then it would be better for Europe as a whole to delay until we were more confident of a happy ending. Investment will continue to flow to this country so long as we succeed in maintaining an environment offering attractive returns, and our macro-economic and supply-side policies are a much bigger factor in that than the exchange rate. Similarly the City will continue to flourish as Europe’s international financial capital so long as the strongest financial firms from all around the world continue to find it attractive to conduct their business here. I see no signs of that changing: indeed the international business of the City continues to increase; and that has very little to do with our national currency, or with an expectation that we will be among the first to merge it into the Euro. So long as we are properly prepared, as we will be, and so long as we have in place efficient infra-structure, including for payments and settlements, as I assure you we will have - in or out, then the Euro, if it comes, will be more of an opportunity than a threat to the City.
This came not a moment too soon. In the immediate post-war period, the UK faced pressing financial infrastructure problems – the so-called “Macmillan gaps”. These gaps referred the inability of small firms to finance themselves with long-term loans. If these gaps sound strangely familiar, then they should. The post-war Bank set about closing these Macmillan gaps with gusto. In 1945 it set up two new financing entities – the Finance Corporation for Industry (FCI) and the Industrial and Commercial Finance Corporation (ICFC). These were financially supported by banks and institutional investors, providing a platform for the supply of longer term funding and venture capital finance to small firms. In 1973, the two corporations combined to form Finance for Industry (FFI). During the early 1980s, the company was rebranded as Investors in Industry, commonly known as 3i. In 1987, the entity went public as 3i Group. This was not a flop. Arguably, 3i and its predecessors were one of the largest feathers in the Bank’s post-war cap, helping support generations of new businesses and start-ups. And those MacMillan gaps? Regrettably, the crisis has re-opened them. Today, small firms are once more starved of finance, including many here in Northern Ireland. Once again, the quest is on for a new financial infrastructure to help close these gaps. Through the 1980s and 1990s, there were further examples of the Bank stepping in to close structural financial gaps. When the UK’s high-value payment system started creaking in the early 1980s, the Bank designed and built a new, bullet-proof system.