In a hyper-connected, capital-light world, the future may increasingly belong to small and medium-sized firms, with platforms (such as taskrabbit, Amazon, Etsy, Shopify, and SamaHub) giving them direct stakes in local and global markets. The financial implications of these developments are only beginning to be realised, but they are likely to be immense. In anticipation, the Bank is already creating the new hard and soft infrastructure that the new finance will require. For example, the Bank of England is in the midst of an ambitious rebuild of the Real Time Gross Settlement (RTGS) system – the backbone of every payment in the UK. There are three ways the Bank’s new RTGS will provide a platform for private innovation. Each will make it easier for people to plug in and pay, even across borders. First, RTGS is being re-built so that new private payment systems, including those using distributed ledger, can simply plug into our system. Our new, hard infrastructure will be future-proofed to your imaginations, opening up a range of potential innovations in wholesale markets, and corporate banking and retail services. We have just opened up direct access to RTGS to a new generation of non-bank payment service providers (PSPs). No longer will access to central bank money be the exclusive preserve of banks. Several non-bank PSPs, focused on retail and corporate services, are applying currently. The electronic money flowing through their systems will become more like its physical relative. Electronic payments are becoming instantaneous by using QR codes or mobile phone numbers.

Seizing the full potential of market-based finance requires the right soft and hard infrastructure for continually open markets. Hard infrastructure like resilient CCPs. Soft infrastructure like the regulation the liquidity management of funds that offer daily liquidity while investing in highly illiquid underlying assets. In particular, it requires hard infrastructure like a robust Bank of England balance sheet that can support the banking system and the broader system of market-based finance. The Bank’s new approach can be summarised in four words: we’re open for business. We now provide liquidity against a wider range of collateral, to a wider range of counterparties, for longer terms, and at lower fees than ever before. And we stand ready to provide liquidity in a range of foreign currencies if required. 13  The financial sector supporters included 20 globally-systemic banks, 8 of the top 10 global asset managers, the world’s leading pension funds and insurers, the largest sovereign wealth fund and the two dominant shareholder advisory service companies. 14 See ‘[De]Globalisation and Inflation’, 2017 IMF Michel Camdessus Central Banking Lecture given by Mark Carney, and Rachel, L and Smith, T (2015), ‘Secular drivers of the global real interest rate’, Bank of England Working Paper No. 571. For a contrary take, see Goodhart, C and Pradhan, M, (2017), ‘Demographics will reverse three multi-decade global trends’, BIS Working Papers No. 656. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  This new approach was tested during the EU referendum. It passed.