Finally, as we talked about earlier, the economic and operational environment we are in is somewhat unusual, and we will consider whether this has any implications for the implementation timelines of any final policy. Conclusion 4/5  BIS central bankers' speeches  A rather ingenious member of my team at the PRA came up with the title of “mutual interests” for this speech. At first I took an instinctive dislike to this title, clever though it is, because I worried it had a hint of collaboration, cosiness, or regulatory capture – all of which I consider to be pure poison for the regulator. But having thought about it further I have concluded that it is actually a pretty good summary of what I’ve been talking about today. With regards to mutuals, parliament has of course always given us specific instructions to consider the impact of our decisions on the sector.6 But more broadly, as we now move into our future phase of rulemaking outside the EU, there will be even more opportunities for us to engage with all of our stakeholders, including industry and Parliament. Across strong and simple, the leverage and MREL reviews, and mortgage risk-weights we all have a very strong mutual interest in getting it right. I would like to thank Thomas Papavranoussis and other colleagues for their help in preparing this speech.
On the one extreme, the PRC and FPC might now decide that the current scope of the framework has served us well, and that it is enough for PRC to continue with its leverage ratio supervisory expectations that currently apply to all firms. On the other extreme, the PRC and FPC might decide that there is benefit in extending the leverage ratio framework to all PRA firms, whether from a micro-prudential or a system-wide perspective. Similarly, the Bank’s MREL review is considering the thresholds for being subject to a resolution strategy requiring use of the Bank’s stabilisation powers, and in connection to that the resulting MREL calibration for mid-tier firms. These links and their implications for the different reviews are being closely coordinated across the three authorities – the PRC, the FPC and the Resolution Authority. No decisions have been made on either, but I expect all three authorities to be saying more on these reviews over the summer – so watch this space. Mortgage risk-weights Finally, I want to close with something that I hope is of interest to both the larger and smaller firms in our audience. Last time I was here, I spoke about the significant decline in UK mortgage risk-weights for firms using internal models – from an average of around 15% in 2009 to around 10% today. This has led to increased prudential risks, and an increasing divergence between firms that use these models and firms that do not.