Such an outcome may not be what we expect to happen or what is likely to happen but rather the worst possible case. The risk has not been generated by the financial sector. But, if it occurred, it would almost certainly lead to a correction in UK asset prices and losses for UK banks. The task of the FPC has been to ensure that such a correction, were it to occur, would not lead to a UK financial crisis. We have tested the banking system to equal and greater stresses to give us the confidence that while losses would occur, unlike 10 years ago, the system would have the capital to absorb them. We have required the banks to hold liquidity, in the currencies that they would need, to withstand a liquidity stress greater than that experienced in the financial crisis. And the Bank stands ready to provide liquidity in all major currencies. And, with other UK authorities, we have ensured that regardless of the Brexit outcome there should not be disruption to the provision of financial services in the UK by EU firms. The Financial Stability Reports of the FPC over the past 18 months have set out the actions that have been taken. The Record of the Financial Policy Committee’s February meeting, published earlier this week, makes clear the Committee’s assessment that the core of the UK financial system is resilient to, and prepared for, the wide range of risks it could face, including a worst case disorderly Brexit.
No, it applies of course to all parts of our activities – everything from our way of making forecasts to how the organisation looks and how we can improve the opportunities to assess how well we are doing. And an important part of this is discussions like the one we are having today. Thank you! 1. Driving forces behind increased openness and clarity   Monetary policy works better  Efficiency reasons  Independence requires openness  Democratic reasons  8  BIS Review 132/2007  2. Increased credibility 5  5 Inflation expectations CPI  4  4  3  3  2  2  1  1  0  0  -1  -1  -2 1994  -2 1996  1998  2000  2002  2004  2006  2008  2010  2012  Sources: Prospera Research AB and Statistics  3. Changes in our communication 2007 February  M ay  September  BIS Review 132/2007  • Forecast for the repo rate • M onetary Policy Report  • Press conference after each monetary policy meeting • No signalling in normal cases • Names in the minutes of the monetary policy meetings  • Repo rate forecast at each monetary policy meeting • 6 times a year  9  4. Other changes…   Time lag between the Monetary  Policy Report and the hearing  UND1X has become CPIX  5. Swedish economy is strong GDP growth. Annual percentage change.