This review will include ‘the need to ensure financial stability is delivered through an effective regulatory framework, with the responsiveness necessary for a dynamic and open financial services sector and an appropriate level of democratic accountability’.1 The first stage of that review, focused on regulatory coordination, was launched in July 2019.2  Ultimately, the design of the post-EU regulatory framework will be for  Parliament to decide in due course. 1  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785618/WMS_final_Commo ns.pdf. 2 For more detail on the review, see https://www.gov.uk/government/consultations/financial-services-future-regulatoryframework-review. I would like to thank Matthew Willison, Hugh Burns, Nicolo Fraccaroli and David Swallow for their assistance in preparing these remarks 2  Last year Sam Woods set out a set of principles to which any future UK regulatory framework should adhere. This speech builds on these principles to propose an ideal framework from the perspective of achieving the Bank of England’s objectives. 3 It then looks at whether the existing empirical evidence, including some new research carried out recently by colleagues in the Bank, supports the framework. Ideal features of the institutional structure of prudential regulation Sam Woods’ six principles of regulation are shown in Figure 1. In building the framework, I start by mapping these principles to three ideal features of regulation also depicted in the Figure. The first feature is that the structure needs to have dynamism. By this, I mean adjustments made to regulation over time to incorporate updated international standards in a timely manner, including to adjust for any unintended consequences of regulation.

•  Liberalising access to financial services is not as straightforward as reducing numerical tariff rates on particular categories of merchandise. •  Financial liberalisation involves addressing issues of harmonising regulatory standards, market conduct practices, disclosure requirements, and conditions of licensing. More so than in trade integration, financial integration requires a certain degree of convergence in the development of financial markets in the respective economies. The financial systems across ASEAN are at very different stages of development and sophistication. Unlike the goods market and most services, financial liberalisation and integration must pay close heed to issues of systemic stability. A key lesson from past financial crises is that premature opening up of financial markets without strengthening domestic financial systems and establishing credible safety nets can have painful consequences. While there are good reasons why financial integration has been slower than trade integration, one cannot help but think that progress could have been faster than what we have seen to-date. In that sense, the pace of financial integration is disappointing. ASEAN Finance Ministers and Central Bank Governors are therefore determined to make up for lost time and press ahead with liberalisation in the post-AEC phase leading up to 2020. While the pace of financial integration has not been as fast as we would have liked, it is important that we recognise the progress that has been made and the opportunities that have been created. Let me now touch on the progress and prospects for integration in banking, insurance, and the capital markets respectively.