I say once a month, but we meet more frequently than that when needed, as we have done for example over the past few weeks. What are some of those threats as I speak here today? We are, of course, still working our way through the implications of the dreadful events in the United States last month. Uncertainty about the near-term outlook increased quite markedly following the attack, and this - together with the  BIS Review 83/2001  1  possibilities of supply-chain and market disruption, particularly in the US - contributed to some sharp adjustments in equity values. A number of sectors most closely affected by the terrorist attacks - in particular air travel and insurance - were badly hit. More recently, equities have rallied somewhat, suggesting that some of the earlier concerns may have been overdone. But the market is still clearly lower than it was at the start of September. These factors have potentially important implications for the inflationary outlook, and therefore for monetary policy. The Bank of England's Monetary Policy Committee - in common with a number of other central banks around the world - reduced interest rates last month, citing in our press release the increased risks of a further slowdown in world growth. Interest rates were cut by a further quarter of a per cent following our meeting last week, and you will be able to read about our reasoning for this decision when the minutes are published on 17 October.
In other ways, though, the aftermath of the attacks on the US has highlighted the robustness of the international financial system. Although several firms suffered grievous losses of staff and destruction of equipment, overall the market place was back up and functioning remarkably quickly. I think there were a number of reasons for this. In the first place the Federal Reserve System did an excellent job in making the necessary liquidity available to markets, both in the United States and in other financial centres through swap arrangements with the ECB, the Bank of England and other central banks. Second, the authorities and systems providers were able to keep the main payment systems (Fedwire and Chips) open during and after the evening of September 11th itself. This was a significant achievement, enabling the huge daily volume of dollar payments to be made, including of course substantial dollar flows from the foreign exchange and other dollar markets based in London. Equally impressive was that most of the big firms affected were using their back-up contingency sites very quickly, allowing them to continue in business with a minimum of obvious disruption. Some of those contingency sites were in New Jersey, others put increased volumes through their London office. In New York itself, connectivity of telephone traffic was initially badly affected because of the routing of so much traffic through connections located downtown. But this problem was short lived.