One consequence is that it will bring us closer to the insurance industry, which for the most part resisted the appeal of Canary Wharf and stayed close to the roots that date back to Barbon. He would have approved, providing he could have built, insured, and rebuilt your building. Time will tell whether you will welcome having your prudential regulator near to your doorsteps, and as far as we know located in the City for the first time. I want to tackle a number of large issues today, which are closely connected. First, why do we think it makes sense to place prudential supervision of insurance in the PRA alongside banks and major investment firms? Second, what style of supervision will the PRA adopt and how will it affect insurers? And third, how do we think about the issue of systemic risk, and systemically important status for insurers? There are over 700 insurers in this country which will be subject to prudential supervision by the PRA and conduct supervision by the FCA (in addition, insurance brokers will be entirely supervised by the FCA). Why place prudential supervision of insurers in the PRA alongside banks? I am tempted to make one point here and conclude, namely that we asked to have one industry that caused us less trouble than banks. Of course, that would be on the basis of  BIS central bankers’ speeches  1  “please keep it that way”.
There are elements of the Code that speak specifically to participants that act as clients: the ninth principle, for example, notes that clients should be aware of the risks associated with the transactions, and regularly analyse their execution. The Code also empowers buy side firms to ask the right questions of their trading counterparties, for example what type of market colour they can expect to receive, and the appropriate transparency that should be provided around execution practices. And from my perspective it is important that buy-side firms ask those questions, as your informed, engaged, participation is vital to market integrity. A second key constituency that needs to embrace the Code is the range of newer market participants that have become increasingly important in recent years. Most notable perhaps is the entrance of non-traditional market makers – particularly principal trading firms – who can play an integral role in mobilising liquidity across the fragmented array of venues. Newer entrants like these may not have been caught in the mire of conduct issues that galvanised the work on the Code in the first place, but their commitment would enhance the Code’s success. In turn the Code’s success will be to their benefit: clearly defined expectations about good market practice level the playing field and are supportive of innovation. More generally, as the new entrants gain market share, they should recognise that increasing numbers of their counterparts are likely to expect them to demonstrate commitment to good conduct.