The FPC links the severity of the stress scenario used in its tests to its assessment of vulnerabilities in the financial system and in household and corporate balance sheets. When vulnerabilities are judged to be elevated, the scenarios used in the test will be more severe and vice versa. 29 Having a positive 2% resting rate for the CCyB when risks are standard means that the FPC is better able to increase the CCyB gradually when vulnerabilities build. Gradual increases in capital requirements are less costly than large, discrete changes, as banks are then able to generate the required capital via retained earnings. 26  All speeches are available online at www.bankofengland.co.uk/news/speeches  26  forecast distribution of GDP) could have been around a quarter less were capital levels just 1pp higher. And that the cost to the central GDP forecast of raising this capital might have been around 0.1 - 0.2pp.
To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements, the gross values should be divided by two. 3  BIS Triennial Central Bank Survey, FX turnover in April 2013. 2  BIS central bankers’ speeches  20. So, what’s next? I expect markets to keep changing, and they will only change faster in the coming years. 21. As technology advances, and Asia providing the engine for global growth in the medium term, I see plenty of opportunities for CLS to put its strategic focus in the region. The HKMA welcomes the CLS’ efforts to put more new currencies and members into its orbit. 22. I look forward to seeing this happen sooner rather than later, and welcome opportunities for cooperation and knowledge sharing between us. This is all because of what I said earlier – that we shared a common vision, and a more widely participated system should mean even less settlement risks for market players. 23. I look forward to celebrating our silver anniversary in 2029. Thank you. BIS central bankers’ speeches  3