To go back to my earlier imperfect metaphor, we want to test whether the track and the cars can cope with an unlikely but plausible combination of adverse circumstances. And you will note that a major part of the adverse scenario is a rise in unemployment and a crash in house prices. We want particularly to test this because housing mortgage debt is around two-thirds of UK banks’ domestic lending. And this brings me onto my second example. Last week, the Financial Policy Committee announced two important measures to address the risk that continued momentum in the housing market could pose to household indebtedness and thence to the economy and to financial stability. I think it is important to understand why the FPC is concerned about the housing market: what we are and are not responsible for and what we can and cannot do. We cannot address  4  BIS central bankers’ speeches  the imbalance between the supply and demand for houses in the UK. The Bank cannot build a single house. Nor should we take responsibility for house prices. It is the risks to financial stability and to the economy we must focus on. The main risk we see arising from the housing market is the risk that house prices continue to grow strongly and faster than earnings and – and this is an important “and” – this increase in prices leads to higher and more concentrated household indebtedness.
But the official sector could possibly mitigate their cost by establishing a coherent framework for crisis management, with payment suspensions as one of the tools. None of this is at all to suggest that the issue of standstills - in or outside the Bank of England - is fully articulated and concluded. It is a difficult area requiring contributions from all sides and the  BIS Review 70/2000  8  intellectual argument is ongoing. Finding the right balance between rules and discretion, in this area as in so many, remains a key issue for policymakers. There is work to be done on the modalities of how standstills might operate in different crisis cases. What is the role of the IMF in the standstill process? Does the process need to be underpinned by statute or would non-statutory principles suffice? And when might a standstill require capital controls to guard against leakage? The Bank is currently working on some of these issues, practical and conceptual. I would encourage those among you with an interest in international public policy to help us in addressing them, joining the growing number of, in particular, US academics who are exploring this topic. It is very much a live debate and I have no doubt these issue will be discussed at length, at and around the World Bank and IMF Annual Meetings in Prague later this month. Conclusion I have now talked myself - quite literally - to a standstill.