We intend to collaborate closely, sharing perspectives on policy issues and technical designs. And we look forward to leveraging advancements arising from Benoît’s new role leading the BIS Innovation Hub. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  Innovation is best achieved by empowering competition. For the Bank, this means levelling the playing field between old and new by allowing new entrants access to the same resources as incumbents, while holding similar risks to similar standards. It also means updating our public infrastructure to enable state-of-the-art private sector solutions to emerge which will lower costs, increase speed and improve customer experience of domestic and international payments. Any new payments system must be efficient, resilient and secure. A safe payment system is only useful if people use it, which means it must deliver fast, user-friendly and inclusive services. This in turn requires that payment systems are open to innovation and competition, and are built around the comparative advantages of central banks and the private sector. Addressing the Climate Crisis My final challenge facing central banks is the most fundamental. Indeed, it is existential. Four years since the Paris Agreement, a more sustainable financial system is being built. It’s funding private sector innovation, it has the potential to amplify the effectiveness of government climate policies, and it could accelerate the transition to a net zero economy. But we must go much further if the world is to reach net zero carbon emissions. Disclosure must become comprehensive. Risk management must be transformed.

We also have a contingent term repo facility that we could activate at a higher frequency if needed; and we – like the ECB – can lend to a very broad range of counterparties against a wide range of collateral. Central banks and regulators must also be clear that liquidity facilities and buffers are there to be used. For example, in October, the Bank clarified our supervisory expectations to re-emphasise our commitment to providing liquidity in the ordinary course of business. We do not expect firms to justify any usage, nor is there any presumption they would use their own buffers before our facilities. Next year’s first system-wide liquidity stress test will be another opportunity to demonstrate that liquidity buffers are fully useable. Increased central clearing would be a capital-efficient way to further improve repo market liquidity; this would be most effective if smaller institutions participated directly. And a more holistic approach by firms to internal capital management would make them more agile, including not applying the leverage ratio at the desk level. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  Liquidity concerns also go to the heart of otherwise immensely positive developments in market-based finance. As is the case for banks, the institutions at the heart of market-based finance, particularly open-ended investment funds, must prudently manage their leverage and liquidity. Mismatches between redemption terms and the liquidity of some funds’ assets means there is an advantage to investors who redeem ahead of others, particularly in stress.