As long ago as 1997, the International Organization for Standardization (ISO) released a standard for the Classification of Financial Instruments (ISO 10962) and designated the Association of National Numbering Agencies (ANNA) as the registration body for this standard.31 More recently, following G20 commitments, the industry has been working to standardise classification of OTC derivative products. The International Swaps and Derivatives Association (ISDA) is working with derivatives clearing houses and other financial institutions to use Financial product Mark-up Language (FpML), which is already used in the industry for communications and processes, to provide a standardised presentation of each listed or cleared product. ISDA published the latest version of its OTC taxonomies in March 2012.32 SIFMA is backing the use of FpML. At a greater level of granularity still, LexiFi is selling a commercial programming language, MLFi, which breaks down financial transactions into their primitive constituents. These elements can be combined using a standardised syntax to describe instruments at any level of complexity. In essence, this approach is an attempt to create a “DNA string” for derivatives. As yet, we are some distance from having a consistent global method for financial product identification. The prize beyond that, a big one, would be to integrate LEIs and PIs using a commonly-agreed global syntax - an HTML for finance. This would allow us to move from words to sentences. It would provide an agreed linguistic base for a common financial language.
I want to build on that track record to do the same for our new tasks because in everything the Bank does, I and my colleagues are conscious that we are accountable to you. The Bank of England has changed radically since that Bank Holiday Monday in 1997 when Eddie George and I sat in the Bank contemplating our new role, unaware of the roller coaster ride on which we were about to embark. The Bank will change again next year with its new responsibilities. But some things don’t change. Here again is Mr. Montagu Norman: AUDIO INSERT: “I would sum up the vital characteristics of the Bank as experience in affairs, cooperation on all sides, independence of judgement. But you know these three things – experience, cooperation, independence – are no good unless people have confidence in you. I like to believe that the Bank, with its long history and tradition, stands high in public esteem. But only by service to the community can that esteem be maintained through times good and bad.” That’s true not just for Montagu Norman’s day, but for today too. The present crisis is far from over, as events in the euro area illustrate weekly. Our own economy is still not back to health. Although inflation has fallen back in recent months, it is still too high. And despite efforts to stimulate the economy, the recovery is proving slower than we had hoped. It will come.