The decision was intended to streamline the UK regulatory framework and, recognising that the distinction between different types of financial firms had begun to blur, to bring together financial regulation in a single organisation and under a single piece of legislation, the Financial Services and Markets Act. In a world crowded with acronyms, this gave an opportunity for something of a cull, consigning the numerous self-regulatory organisations or SROs - like SFA, IMRO and PIA to history! However, while you may be able to take financial supervisors (quite literally) out of a central bank, you cannot remove all responsibility from a central bank for the safe-running of the financial 7 system. The Bank stands at the heart of the financial system not only in the implementation of monetary policy, monitoring the financial intermediaries that make up the transmission mechanism for policy changes, but also operationally, as a market participant: on a daily basis carrying out open market operations or providing final settlement for payment systems across accounts at the Bank; or, in more extreme circumstances, intervening in the market to support the currency or to provide liquidity to a bank in difficulty. Thus, while responsibility for supervision of individual banks has moved to Canary Wharf, the Bank has retained responsibility for maintaining the stability of the financial system as a whole.
The state, as the ultimate backstop, was then forced to step in to bail out a number of banks, not just to ensure the means of providing credit in the economy but also, crucially, to back up the claims that these banks had issued as money to a large part of the population. Banks responsible for close to half of the UK’s personal current accounts6, holding some £ were rescued by the state.7  There has as a result been a major programme to tighten the prudential controls on deposit taking banks and to increase the size of the deposit guarantee that is paid for by the industry, which has reinforced further the reliability of commercial bank money and shifted the burden of backstopping that reliability from the state towards the private sector. Looking to the future  The shift towards transacting in private commercial bank money has accelerated greatly in recent years, driven by technology and by changes in the way we live. It is not possible to transact in central bank money over the internet or by using one’s smartphone. As a result, cash use is declining fast in the UK. In 2008,  4  The 1844 Bank Charter Act gave the Bank of England a monopoly on the issuance of Bank notes in England and Wales. It followed a number of failures of ‘country banks’, who had issued their own notes.