Taken together, these requirements are designed to bring about a material increase in the stability of the system as a whole – but in terms of their influence on the structure of the market, they also amplify the impact of the demand and technology drivers, further intensifying the pressures towards rationalisation and convergence. What is the Bank of England’s role in all of this? Our primary objective is, as it has always been, to maintain monetary and financial stability. But that does not mean holding back innovation or competition. Far from it: our role should be to help enable these things, where that can be done in ways that do not compromise stability. That could include: modernising risky, out-of-date systems; reducing single points of failure by increasing interoperability and reducing concentration; strengthening protections against cyber attack; improving risk management; and reducing operational and settlement risk by reducing settlement periods. We pursue our objectives in three ways: –  First, through the use of our balance sheet. Ensuring that settlement occurs in central bank money has been a major achievement of the past twenty years, and it is important that this should continue, however the structure of the market develops in future years. That is a central design principle of the proposals we recently announced for the new generation of RTGS, and will be delivered though broader access for infrastructures, adoption of ISO 20022 as the new messaging standard, maintenance of the existing DVP link for CREST and regular FX settlement for CLS,  8  http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/feb/BlockChain-In-Capital-Markets.pdf.

The Bank did this by: setting up a senior level Steering  4  Summarised in http://www.bankofengland.co.uk/archive/Documents/historicpubs/qb/1995/qb950107.pdf. 5  Today, the standard settlement times in CREST are T+2 for equities and T+1 for gilts. 4  BIS central bankers’ speeches  Committee to oversee the development of the design; forming many working-level working groups and consulting on all major design decisions; and ensuring that the industry bore the cost of the overall project. The Steering Committee was for making decisions and knocking heads together. According to a “senior banker” quoted by the Independent newspaper, Pen Kent (as Chair) and Iain Saville (as Chief Executive) were a “Mr Nice and Mr Nasty’ duo … bludgeoning the vested interests which sank TAURUS into submission” 6. The consultations were voluminous, had short turn-rounds (some as little as two weeks), and respondents received personalised replies (much to their initial surprise): a strategy christened “choking the cat with cream”. And the financial commitment sought by the Bank was broad-based: when CRESTCo was first established, 69 institutions were asked to subscribe £ in share capital, giving them skin in the game from the start. Second, the project team committed to an approach to building CREST that was simple, focused and open: in the design of the system itself, and in the composition and work practices of the project team. From the start, the November 1993 “Green Book” set out a deliberately minimal blueprint, excluding non-critical functions required only by a few, or which could be performed by users in their own systems.