Page 6  Undertaking the assessments of access and operating hours is critical The reports encourage central banks and authorities to review the benefits, risks and barriers of expanding access and operating hours and set out a framework to do so. The report on access sets out a holistic framework that central banks and authorities can follow and by providing realworld examples and case studies of jurisdictions that have successfully expanded access. And the report on expanding operating hours encourages authorities to assess the three end-states and reviewing the opportunities, risks and policy implications for each of them. While the reports say “encourage”, I would really urge central banks to undertake such reviews – the more that change, the greater our ability to meet the FSB global targets. With building blocks 10 and 12 being foundational for the roadmap, undertaking the assessments and taking action to expand access and operating hours will also have a direct positive impact across many building blocks. The Bank of England’s Renewed RTGS service I want to bring this to life by outlining what the Bank of England will be doing in response to these two reports and how our RTGS Renewal Programme will support this work. [18] The Bank is in the process of a multi-year project to renew RTGS. While changing our domestic infrastructure, this Programme also has an eye to opportunities to enhance cross-border payments.
Today, that fraction is less than 15%. There has also been a sharp fall in the fraction of shares held directly by individuals, from more than 50% in the 1960s to little more than 10% today. Today, these individual holdings tend to be indirect, operating through investment intermediaries of various types. That means the beneficial owners of shares – individuals – tend to have little direct communication with, involvement in, or indeed knowledge of, the firms in which they are investing. One consequence of a more dispersed and disinterested ownership structure is that it becomes harder to exert influence over management, increasing the risk of sub-optimal decision-making. 17 There is some empirical support for this hypothesis. For example, companies tend to have higher valuations when institutional shareholders are a large share of cashflow, perhaps reflecting their stewardship role in protecting the firm from excessive risk-taking (La Porta et al (2002), Claessens et al (2002)). (c)  Short-termism  A third friction in the manager/shareholder relationship, distinct but related, arises when different classes of shareholder have different rates of time preference. In particular, there have been concerns about the rising share of investors with excessively high discount rates and low holding periods – in other words, about “short-termism” (Kay (2012)). There is clear evidence of the investor scales having rebalanced in this direction over time. Average holding periods of shares have been in secular decline in a large number of countries for a number of decades (Chart 1).