And we’ll work together to ensure that, if the safety of the system relies increasingly on them, the standards they meet reflect their systemic importance. Because none of these competitive trends are to be stifled. In fact, they are to be spurred. Our job is to enable and encourage, ensuring these developments achieve their full potential. Conclusion  Five years ago, few could conceive of this unbundling of banking. In the wake of the crisis, any return of borrowing seemed a long way off. And Brexit wasn’t even a word. The lesson: stuff happens. And because it does, we all benefit from a financial system that can serve in the bad times as well as the good; from a system that doesn’t disrupt the economy but can deliver for it. But no set of rules, however detailed, will deliver that for all time. The framework that’s now five years old reflects that by hard-wiring the duty to keep up. Keep up with the macro trends. So that, whatever happens, the Square Mile is regulated for the good of all 94,000 square miles of the UK. Thank you. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Charts Chart 1: Annual growth rates of UK mortgage and consumer credit lending  (a)  Chart 2: Spreads between quoted mortgage rates and risk-free rates  (a)  Source: Bank of England. (a) Sterling net lending by UK MFIs and other lenders to UK individuals. Seasonally adjusted. Consumer credit series excludes student loans.
The first and most obvious of those is Brexit. The challenge is to keep finance capable of serving the economy through Brexit, whatever form Brexit takes. 4  Reported in Brooke et al (2015). 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  The first condition for that: UK banks must be able to withstand any economic shocks arising from Brexit. In our judgement, that condition is met. Even the most severe economic scenarios for Brexit are encompassed within the scenario we’ve tested the banks against in our annual tests. They can pass that test. So they can pass the Brexit test too. But that’s not enough in this case. Because barriers to delivering wholesale financial services across the Channel could disrupt the end users in the real economy. The UK is a net provider of such services to the EU, so end users there stand at most risk of disruption. But end users in the UK would also suffer some disruption. UK investors invest in funds domiciled in the EU and 10 million UK policyholders have insurance policies with EU insurers. 77 branches of EEA banks operate in the UK, providing services that benefit end users in both the EU and the UK. That’s why, from the very start, we have overseen contingency planning across the financial system. And because it would be difficult, by March 2019, for all financial institutions to complete all the steps necessary to avoid disruption, we called for an implementation period.