Practically, that may mean fewer (perhaps far fewer), more (ideally much more) experienced supervisors, operating to a smaller, less detailed rulebook. That would reduce the risk of self-defeating defensive supervisory actions. It would mean being brave enough to allow less to deliver more. Market discipline, Pillar 3, would also be strengthened by simplified regulatory rules and practices. For investors today, banks are the blackest of boxes. One area of conspicuous darkness is banks’ risk weights. More than half of all investors do not understand or trust banks’ risk weights (Barclays Capital (2012)). Their multiplicity and complexity have undermined transparency and, with it, market discipline. Greater simplicity and consistency of risk weight information would help restore discipline. In 2009, the UK Financial Services Authority (FSA) asked banks to estimate the capital they would hold against a common hypothetical portfolio. 24 Repeating that exercise internationally would shed some sunlight on international banks’ capital treatment, helping restore market discipline. Beyond risk weights, there is a case for re-considering the wider disclosure agenda. Here again, more is not necessarily more. The explosion in banks’ reporting over the past decade has not conspicuously helped in pricing bank risk. Important detail is often lost in the thicket of figures, with investors and regulators seeking the needle in the rising haystack of information. Cutting back the thicket, re-sizing the haystack, could actually enhance transparency and bolster market discipline. (d)  Taxing complexity  Until recently, complexity had not been penalised by the regulatory framework.

This leaves the Bank with its traditional responsibility for maintaining the stability of the financial system as a whole, but transfers our present specific responsibility for banking supervision to a new, single, regulator for the whole of the financial services industry. The Bill now before Parliament legislates for these changes insofar as they affect the Bank and it also changes the arrangements for the Bank’s internal governance and puts our finances on a statutory footing. The new legislation does not fundamentally alter the Bank’s raison d’etre - our core purposes. The heart of it remains the maintenance of monetary and financial stability, as well as the promotion of the effectiveness and efficiency of the financial system. But it brings new clarity to our responsibilities, and it ensures greater transparency and public accountability in relation to all our activities. It is in fact a radical re-styling of the Old Lady. And tonight I should like to introduce you to the New Lady, and explain just what it is that the new-style Bank of England is seeking to do and how we are organised to manage our affairs. Governance of the Bank Let me begin at the top with the changes to our governing body - the Bank’s Court - or Board - of Directors. We already have a heavily non-executive based board, consisting of myself and the Deputy Governor, four full-time Executive Directors, and twelve non-Executive Directors. The new Court will be entirely non-executive apart from myself and two Deputy Governors.