And operational reforms designed to address the deficiencies in the Bank’s pre-crisis lending tools and flag 5  clearly that the Bank was ‘open for business’ , have left the Bank capable of lending to a wide range of banks and non-banks, against many different types of collateral, at lower prices, and through a broad range of facilities. As of 2016, members of the Bank’s Sterling Monetary Framework – our main liquidity-providing tool – had pre-positioned over £ of collateral with us, including 30% of the UK’s total stock of household mortgage loans. Only a fifth of that collateral had been drawn against, through the Funding for Lending Scheme and other Bank facilities. Even after accounting for the Bank’s sizeable haircuts, that leaves well over £ of available credit: a much higher proportionate level of contingent exposure for the Bank than typically incurred by commercial banks through undrawn facilities. So our balance sheet may expand in both scale and riskiness at times of heightened liquidity stress: the Bank of England’s role as financial firefighter has shifted permanently upwards (Chart 5). 5  See http://www.bankofengland.co.uk/publications/Documents/news/2012/cr2winters.pdf; and the Bank’s new framework at http://www.bankofengland.co.uk/markets/Documents/money/publications/liquidityinsurance.pdf. The reforms are summarised in a speech by the Governor at http://www.bankofengland.co.uk/publications/Pages/speeches/2013/690.aspx. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  The third key driver behind our new risk framework has been the strong public demand for greater accountability and transparency from central banks since the financial crisis.

The report emphasises a number of advantages: •  Electronic trading systems make it possible to manage large amounts of trading-related information. This enables all trading-related processes in the financial companies to be integrated, which in turn provides opportunities for linking together the entire transaction chain (business contracts, confirmation, clearing and settlement). This is known as straightthrough-processing (STP). •  Electronic trading also enables a greater insight into the market. This can in turn make it possible to reduce any information symmetries between different players. That is, of course, a disadvantage for those who have previously profited from the imbalances, but normally benefits the system as a whole. 1  Bank for International Settlements:, [2001], "The implications of electronic trading in financial markets". Report by a working group established by the Committee on the Global Financial System of the central banks of the Group of Ten countries. BIS Review 37/2001  1  •  Another important aspect is that electronic trading enables anonymity during trading. This often has a positive effect on the markets' method of functioning and thus their efficiency. For instance, it can facilitate settlements of large positions. •  The opportunities for access to the market can also be improved, if desired. This applies both from a geographical perspective and for different types of players. An opportunity is thereby given to influence the structure of the market in that more players with different needs can be active in many different markets. This can lead to improved liquidity and greater competition.