The peer group includes Barclays, Cooperative Banking Group, HSBC, Lloyds Banking Group, Nationwide, RBS and Santander UK. (d) From 2018, Basel III Tier 1 capital ratios reflect IFRS 9 transitional arrangements as agreed in European law. (e) Series begins at end-2007. Chart 2: UK banks’ holdings of liquid assets Liquidity Buffer  (a)(b)(c)(d)(e)  LCR HQLA  £ 800 750 700 650 600 550 500 450 400 350 300  2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: PRA regulatory returns (a) UK liquidity consolidation groups for major 7 UK banks. (b) DLG consolidation is applied to Barclays, HSBC, Lloyds, RBS and Santander UK, whilst solo UK entities are shown for Nationwide and Standard Chartered. (c) Liquidity buffer refers to the liquidity held under the ILG regime, which is reported weekly until at least July 2019. (d) LCR HQLA refers to high quality liquid assets under the EU Delegated Act (reported monthly since October 2015). (e) Definition of liquid assets is broader under the LCR. 17  All speeches are available online at www.bankofengland.co.uk/speeches  17  Chart 3: Modelling errors in market risk (10 years of data)  (a)(b)(c)  Variance Squared bias MSPE  4.50E-05 4.00E-05 3.50E-05 3.00E-05 2.50E-05 2.00E-05 1.50E-05 1.00E-05 5.00E-06 0.00E+00 1  2  3  4  5  Past days modelled Source: Hinterschweiger, Neumann, and Saporta (2018), ‘Risk sensitivity and risk shifting in banking regulation’, Bank of England Financial Stability Paper No.44 (a) True model is number 3.
But there have been shafts of light amidst the general gloom - and I prefer to focus on those this evening. In terms of the global economy there are now tentative signs that the worst may soon be over, with the prospect of gradual recovery as we move through this year. That should provide some support for global equity markets. With inflationary pressures subdued, monetary policy generally can, for the time being at least, afford to remain reasonably supportive - though I make no predictions as to what that may mean for interest rates. And crucially, for all of us, the international financial system has so far and I recognise that problems are often slow to surface but it has so far - stood up well to the successive shocks. Much more broadly, I am encouraged that - as with the Asia crisis a few years ago - the recent pressures have not generally called into question the real benefits of the market economy, in terms of growth, and employment, and rising living standards, but have rather contributed to a growing recognition that those benefits can by-pass poor countries, and poor communities within countries, and that it is in our collective interest that those who are excluded, one way or another, should be helped to help themselves to participate in those benefits. In the context of globalisation, that was reflected in the Doha agreement on a new round of world trade negotiations; and development financing will be the theme of the Monterrey Summit next month.