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 That could include: modernising risky, out-of-date systems; reducing single points of failure by increasing interoperability and reducing concentration; strengthening protections against cyber attack; improving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.

Gertrude Tumpel-Gugerell: Elements for intervention on accounting issues Speaking notes by Ms Gertrude Tumpel-Gugerell, Member of the Executive Board of the European Central Bank, at the colloquium “La juste valeur dans tous ses Etats”, organised by the Académie des Sciences et Techniques Comptables et Financières, Paris, 27 April 2010. *  *  *  Which are the issues related to the fair value for companies? Fair value is an appropriate measurement for certain financial instruments, notably those that are held for trading (i.e. business model is to generate profits by buying/selling in the short term) and for which reliable market prices are readily available, as well as for derivatives. Indeed, given that many derivative contracts have a zero cost at inception, fair value accounting is crucial as it recognises the potential leveraged exposure on the balance sheet. Fair value accounting mainly raises two issues: first, when to apply fair value measurement (conceptual considerations) and second, how to apply fair value measurement (operational challenges). First, in our view fair value accounting does not provide decision-useful information to investors if the intention of an entity is to hold the assets until maturity or to settle the liabilities at their nominal amount at maturity. In these cases, recognising interim fair value changes simply heightens the volatility of the financial accounts, without providing actual “information content”. This is typically the case for the loan book of commercial banks.