The new framework has largely been set by international standards, and for the UK by the incorporation of those standards in EU law. The Basel reforms to bank capital and liquidity standards have very materially strengthened the protection of capital and liquidity reserves that individual banks hold to meet bad times. Regulatory capital requirements are set to be up to ten times higher than before the crisis for the most systemically important institutions and banks will face internationally agreed liquidity ratios for the first time. In the UK and other jurisdictions, leverage ratios have been introduced in advance of an international standard that is in train and structural separation measures are being implemented. These reforms have strengthened the position of individual firms and in doing so the resilience of the system as a whole. But the Basel and other reforms have also recognised explicitly that these levels of protection need to be set not only to protect investors in individual firms but also to protect all of us, the whole economy, from the damage to the system that can be done when systemic firms get into trouble. Banks that are globally systemic are now required to hold more resources – equity capital – that can absorb losses if and when things go wrong. The extra protection is graded by the systemic importance of the firm. The aim is that these systemically important players can continue to operate within the system, serving the real economy, even in bad states of the world.

Those interested in these debates can read the following book: Christophe Bonneuil and Jean-Baptiste Fressoz’s book “The shock of the Anthropocene: The Earth, History and Us”. x Crutzen, P.J. (2002). “Geology of mankind: The Anthropocene”. Nature 415: 23 xi See e.g. : Feynman, J., and Ruzmaikin, A. (2007). “Climate Stability and the Development of Agricultural Societies.” Climatic Change 84 (3–4): 295–311. https://doi.org/10.1007/s10584-007-92481 xii Steffen, W., Rockström, J., Richardson, K., Lenton, T.M., Folke, C., Liverman, D., Summerhayes, C.P., et al. (2018). “Trajectories of the Earth System in the Anthropocene.” Proceedings of the National Academy of Sciences of the United States of America 115 (33): 8252–59. https://doi.org/10.1073/pnas.1810141115. xiii Ripple, W.J, Wolf, C., Newsome, T.M., Barnard, P. Moomaw, P.R. (2019). “World Scientists’ Warning of a Climate Emergency.” BioScience. https://doi.org/10.1093/biosci/biz088. xiv Article 1 of the NGFS states the following: “Objectives of the Central Banks and Supervisors Network for Greening the Financial System The Central Banks and Supervisors Network for Greening the Financial System (NGFS) is a group of Central Banks and prudential supervisory authorities willing, on a voluntary basis, to exchange experiences, share best practices, contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy”. xv See NGFS Statement: statement_on_nature_related_financial_risks_-_final.pdf (ngfs.net) xvi NGFS and INSPIRE (2021), Central banking and supervision in the biosphere: An agenda for action on biodiversity loss, financial risk and system stability. NGFS Occasional Paper. xvii van Toor, J., Piljic, D., Schellekens, G., van Oorschot, M., & Kok, M. (2020).