4  All speeches are available online at www.bankofengland.co.uk/speeches  4  The City has long been a leader in financial innovation from the development of the eurobond market in the 1960s through to becoming the Western hub for renminbi and rupee businesses, and Europe’s premier centres for Islamic and green finance. London also has the most vibrant FinTech centre with revenues of £ billion and employment of over 61,000, both of which are growing rapidly. 7  Alongside these benefits for the UK, Europe, and the world, there are risks – risks that first and foremost are borne by the UK. The UK financial system is almost ten times GDP, and is arguably the most sophisticated and complex in the world. Large complex financial institutions and major wholesale financial markets are inherently risky. Left unattended, these risks can easily spill over and damage the domestic real economy. Openness and interconnectedness mean shocks from abroad quickly reach our shores. This is particularly true for risks from the euro area given the tightness of our trade and financial linkages. Equally, these tight linkages mean that others rely on us to maintain high standards of resilience and to share relevant information openly and cooperatively. In short, hosting the leading international financial sector brings immense responsibilities alongside great prosperity. The Bank of England’s primary responsibility is to protect our domestic real economy, and to ensure that finance serves it rather than the other way around.
We allow third country branching, under certain conditions outlined in our 2014 Supervisory Statement. 11  The key factors which have determined the  PRA’s stance towards non-EEA branches are the equivalence of the supervisory regime of the home state, and arrangements for resolution. Second, information sharing is fundamental. Even if two countries have exactly the same set of rules, if they cannot share information on the financial positions of different entities within a global financial group, they cannot clearly gauge and manage the risks that the firm may be running on a consolidated basis. We have seen a few examples of the value of such cooperation in recent years. The FSB and Basel Committee have developed a number of guidelines on information sharing, which have helped foster trust, cooperation and enhanced dialogue between international regulators. These include supervisory and crisis management colleges and supervisory assessments. The EU has further enshrined  10  A global code for the foreign exchange market, put together with support from central banks, will be launched in May as the first globally consistent code of conduct for these markets. 11 ‘Supervising international banks: the Prudential Regulation Authority’s approach to branch supervision’, SS10/14, available at http://www.bankofengland.co.uk/pra/Documents/publications/ss/2014/ss1014.pdf. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  these practices through legislative requirements in the CRR and BRRD for supervisors and resolution authorities respectively. The Bank is a staunch supporter of these mechanisms.