And through the process of stress-testing the balance sheets of financial institutions, the FPC and PRA are now laying out transparently the risk standard they are requiring from firms and from the financial system as a whole and which is the subject of external scrutiny. But this has not fully allayed occasional criticisms of the Bank’s regulatory policy choices. At various times, the Bank has been warned against pursuing the stability of the graveyard or the tendencies of the Taliban. A somewhat better defined financial stability anchor, set by Parliament and reflecting society’s desires, could over time damp these criticisms. In the 1950s and 1960s, central banks and academics strove to define an appropriate anchor for monetary policy. That brought success, with inflation targets and attitudes now wellanchored. This gives grounds for optimism that financial stability can follow the same path though, as monetary policy found, the journey is likely to be long and arduous. Myopia biases The Bank’s monetary, macro-prudential and micro-prudential policy regimes all exhibit instrument independence. Decisions are made by Committees of technocrats, operating at arms-length from the political process. The case for delegation of policy responsibility is founded on myopia biases within society at large or among its elected representatives. In a monetary policy context, myopia tends to manifest itself as a desire to bring forward tomorrow’s income to today, typically by setting monetary policy too loose. As one former US president is rumoured to have put it, “I want tight money – and lots of it”.

Next steps to deliver meaningful change  Due to strong interdependencies between the building blocks, the most significant enhancements will arise if over time all building blocks are advanced and implemented in a coordinated way, and appropriate monitoring and governance will be needed to ensure that this work progresses. The Stage 3 roadmap for change has set out the goals, actions, milestones and actors needed to deliver the building blocks. While all actions for 2021 are committed deliverables, those beyond 2021 are necessarily more indicative to allow for adjustment in response to new information and developments. The roadmap also acknowledges that  9  https://www.bankofengland.co.uk/bank-overground/2020/legal-entity-identifiers-the-code-to-a-digital-economy Bank of England, 12 March 2020, ‘Central Bank Digital Currency: opportunities, challenges and design’. https://www.bankofengland.co.uk/paper/2020/central-bank-digital-currency-opportunities-challenges-and-design-discussion-paper  10  7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  different countries might need to introduce the building blocks at different times, reflecting different starting points and legislative frameworks. The involvement of the private sector, sharing their insights and practical expertise, as well as delivering change, will be key to support the practical implementation of the roadmap. I believe that the timelines and actions in the roadmap and the fact that the pace of this work has been maintained during what has been an unprecedented year for us all, underlines the importance and urgency placed on improving cross-border payments.