Andrew Bailey: Speech at the Lord Mayor’s Banquet Speech by Mr Andrew Bailey, Deputy Governor of Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority at the Bank of England, at the City Banquet, London, 16 October 2014. *  *  *  Lord Mayor, thank you once again for inviting us round to Dinner. Events at the Mansion House never cease to be special, with an aura that sets them apart. It is a true story from some years ago that a very senior official from another country came to a lunch at the Mansion House, at which he spoke, and after which he came to visit the then Governor of the Bank. He had been impressed by the grandeur of the surroundings, the food and drink, the speeches (in plural), but he had just one question for the Governor. How does anyone make money in the City if that is how they carry on? The Governor was wise and slightly avuncular in his answer, to the point of remarking that it is not a question that anyone in the City would ask. Lunches may have become shorter, but dinners remain a place to take stock over good food and wine and with good company. And, for Martin and me it is a chance to take stock after just over eighteen months of the new arrangements. The PRA is responsible for the prudential supervision of banks, insurers and major investment firms.
In this context, the ECB cannot commit itself to move its interest rates in a certain way in response to specific actions or plans of other policymakers. Monetary policy has to take the overall economic situation into account in its assessment of the risks to price stability. For a monetary union to be viable, the fact that monetary conditions may not be tailored to the specific needs of each individual component of the euro area has to be accepted. Explaining this properly to eleven countries with different economic, political and cultural backgrounds is also one of the challenges we are facing. It will probably be better understood over time, subject to further progress being made towards a positive attitude regarding European integration. Such a positive attitude – that is seeing Europe as a positive opportunity – will also help to cope with the challenges posed by the accession of new countries to the EU. This leads me to the second part of my presentation. 3  BIS Review 116/1999  2. Looking ahead – the accession of new countries to the EU and, eventually, the euro area  European integration as well as monetary union is an ongoing process and will continue to be so in the future. Four EU countries have, for different reasons, not yet adopted the euro. Without elaborating on that, let me simply state that they may well join in the coming years.