As only 10 days had passed from the EU referendum, I was anticipating that I would be spending significant amounts of my time thinking about how to approach prudential policy during a period of uncertainty over the UK’s future relationship with the EU. I had not anticipated, however, that the finalisation of Basel III, which at the time was expected to be agreed by the Group of Central Bank Governors and Heads of Supervision in January 2017, would be delayed by another 11 months, during which time a number of people would doubt whether it would be finalised at all. But on 7 December 2017, Basel III was finalised. This is a major milestone for regulators globally, including the Bank of England, which has been at the forefront of prudential reforms internationally. Not only because it signals the continuation of a cooperative approach to standard setting for internationally-active banks, but importantly, because it puts in place the final elements of the reforms to banking regulation agreed since the crisis. What has been achieved? The scale of these reforms has been remarkable: between the start of 2009 and December 2017, when 1  Basel III was finalised, the Basel Committee on Banking Supervision published 47 standards. To put that in context, in the preceding twenty-year period, between the time Basel I was agreed in 1988 and the crisis, the Basel Committee had published less than half of that number – 21 standards. The reforms have also touched a wide range of different aspects of bank regulation.

As well as extensive changes to risk-weighted capital requirements, the Basel Committee has published standards for a leverage ratio requirement, liquidity requirements and large exposures limits. 1  This is a count of publications by the Basel Committee of the publication type ‘Standards’. Where a standard was published in the period and subsequently superseded by another standard within the same period both standards are counted. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  In the United Kingdom, we have also developed a range of domestic reforms reflecting the importance of the banking system as a share of our economy. 2  These reforms range from the development and implementation of a new institutional framework for macroprudential policy to deal with threats to financial stability, to the design of microprudential remuneration rules that better align risk-taking incentives with variable pay, to the Senior Managers and Certification Regime aimed at improving individual accountability at PRA-authorised institutions. We have also undertaken structural reform to protect retail payments and lending to households and businesses from shocks to other parts of banking groups specialising in serving wholesale customers. We are well on track to deliver structural reform in January 2019, including higher capital buffers for ring-fenced banks. Yesterday, the PRA issued for consultation proposals to implement leverage ratio requirements and buffers for ring-fenced banks whose groups are required already to meet leverage ratio 3  requirements on a consolidated basis, and to reflect these higher leverage buffers in group capital.