We work closely with the resolution function of the Bank of England to develop and put into effect workable resolution plans. 2  BIS central bankers’ speeches  I said that I would also comment on the PRA’s approach to the governance of firms, so let me now turn to that. I will start with an observation based on experience of the crisis, namely that is uncommon and rare to find a problem in the capital or funding or business model of a firm which cannot be traced back to a failure of governance. I don’t think this is a radical statement by any means. But it does mean that fixing capital, liquidity, and other areas of risk do not on their own deal with all of the problem. Put another way, it would be unwise to do all of these things and ignore governance. Good governance is critical to delivering a sound and well-run business. At the instigation of the Parliamentary Commission on Banking Standards, we are this year implementing the new Senior Managers Regime. The key principle of that regime is to establish clearly appropriate responsibility for the governance of firms. Put like that, it is not meant to be radical or life-changing, despite whatever you may hear and read. We do want to avoid what the PCBS described as the Murder on the Orient Express outcome when firms get into trouble, which is akin to the “everyone and no-one” is responsible but everyone is connected to the event.
But the primary role of all NEDs is independent oversight and challenge of the Executive and the PRA recognises that the actual responsibilities of NEDs within the scope of the regimes differ from those of executive Senior Managers and they should be clarified and limited accordingly.