With more competitors around, the wider effects of the failure of an individual bank would in all likelihood be smaller. The stability authorities need to be more alert than in the past to this source of economic vulnerability. Consistent with that, as we prepare for the transfer of prudential supervision, the Bank of England wants to reduce barriers to entry somewhat, so that the banking system can, over time, become less concentrated. But for that to be sensible, we need to be confident in the authorities’ ability to resolve those banks that get into distress without dramatic spillovers – lowering barriers to entry by removing barriers to exit. For smaller banks, that should already be possible using the Special Resolution Regime introduced in 2009. Prudential supervisors will need, as a priority, to ensure that banks are set up to enable the Financial Services Compensation Scheme to pay out rapidly. To be clear, for banks funded by insured deposits, the costs of failure will fall on their peers. Over time, I suspect that that will increase pressure for a funded deposit-guarantee scheme with risk-based levies. The Bank would welcome that. Prudential regulation: higher risk-based capital requirements and a cap on leverage But the reform agenda is not just about handling failure. Banks will be better capitalised, more liquid, and less interconnected. To take just one of those changes in the global order, higher capital requirements will affect behaviour as well as resilience.
The first panel will be moderated by Mr. Liviu Voinea, Deputy Governor and will approach the theme of investments and investment finance in 2018. The second panel will be moderated by Ms. Lara Tassan Zanin, Head of The European Investment Bank Office in Romania and will focus on the support of sustainable growth in Romania, shifting from consumption to investments. Ladies and gentlemen, Romania and the European Investment Bank share a long and fruitful cooperation that started in 1990. It got closer in 2007 when Romania became a member of European Union and implicitly of European Investment Bank. This joint partnership has boosted investments in Romania in areas of significant importance for the national economy, such as the infrastructure, small and medium enterprises, environment and innovation. These coordinates are totaling more than 13 billion EUR allocated to around 130 projects financed by the European Investment Bank, besides other 70 projects financed by the European Fund for Strategic Investments. These figures alone speak about the priorities, however I would like to point out that the financial impact transcends beyond the sum of total loans. There is significant potential for development and improvement. Romania is a net beneficiary of EU funds, the latest data showing a positive aggregate balance with more than 32 billion EUR as net received funds.