These 4  proposals are in line with the Bank’s leverage ratio policy statement published in 2015 and the statement of 5  policy on the systemic risk buffer framework from 2016. These proposals mark the end of the policy development cycle on this flagship reform since the crisis. Complementing these domestic structural reform measures, policymakers both here and internationally have put in place resolution regimes to end too-big-to-fail. Jon Cunliffe has recently discussed developments in this policy area. 6  A lot has been said about the progress made through these international and domestic reform agendas in 7  strengthening financial resilience , so I will not dwell more on this topic here. Suffice to say that UK banks’ ratios of high-quality capital to risk-weighted assets are on average over ten percentage points higher than 2  UK banks’ assets are close to 400% of UK GDP. See ‘UK leverage ratio: applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer, Prudential Regulation Authority Consultation Paper 14/18, https://www.bankofengland.co.uk/prudential-regulation/publication/2018/uk-leverageratio-applying-the-framework-to-systemic-rfbs-and-reflecting-the-srb. 4 See ‘Implementing a UK leverage ratio framework’, Prudential Regulation Authority Policy Statement PS27/15, https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/policystatement/2015/ps2715.pdf?la=en&hash=5DBB377CD051FA67D16BCA1662DBE696682AF56B. 5 See ‘The PRA’s approach to the implementation of the systemic risk buffer’, https://www.bankofengland.co.uk//media/boe/files/prudential-regulation/statement-of-policy/2016/the-pras-approach-to-the-implementation-of-the-systemic-risk-buffersop.pdf?la=en&hash=6954AC9765597EB5598414171D90C25982A144CE. 6 ‘Central clearing and resolution – learning some of the lessons of Lehmans’, 5 June 2018, https://www.bankofengland.co.uk//media/boe/files/speech/2018/central-clearing-and-resolution-learning-some-of-the-lessons-of-lehmans-speech-by-joncunliffe.pdf?la=en&hash=954FF2E62AA3A5AB6ADCDEA88188FB6697F9B0CD. 7 E.g., see ‘What a difference a decade makes’, a speech by Mark Carney, https://www.bankofengland.co.uk//media/boe/files/speech/2017/what-a-difference-a-decademakes.pdf?la=en&hash=CA8F77C4F518DCFB8C697C03704773370C82326D, ‘Ten years on: lessons from Northern Rock, a speech by Jon Cunliffe, https://www.bankofengland.co.uk/-/media/boe/files/speech/2017/ten-years-on-lessons-from-northernrock.pdf?la=en&hash=9543F1499C211A505206615DA86C8C88D7988365, ‘The revolution is over.

Firms must have a safe and sound process for addressing all aspects of this transition. They also need to select alternative rates that are robust and resilient, in line with current best practice. At the Fed, we’ve been thinking about this risk across all portfolios, 5/8  BIS central bankers' speeches  from small community banks to the largest institutions. Our focus so far has been on outreach and education. We have been encouraging examiners to raise awareness with their supervised institutions, and we’ve provided them with some tools to enage in this discussion. We’ve also been reviewing our own contracts that use reference rates to make sure we’re walking the talk. Anecdotally, the largest financial firms seem to be more aware of the challenges than smaller ones. Last September, the UK Prudential Regulation Authority and FCA sent a “dear CEO” letter to the heads of large banks and insurance companies to seek assurance that their senior managers and boards understood the risks of LIBOR transition and were taking appropriate action ahead of end-2021.22 As the larger firms prepare for the transition, they are beginning to work on the operational challenges the transition will present. You all know that those kinds of system changes are never simple or straightforward. The potential death of LIBOR is causing everyone in the market a lot of grief, and everyone goes through the five stages of grief at their own pace.