14  All speeches are available online at www.bankofengland.co.uk/news/speeches  14  Chart 17 Map of who holds leveraged loans and in what form Indicative estimated global stock of leveraged  Indicative estimated holdings of leveraged loans by  loans by product type  global investors  Sources: BarclayHedge, Bloomberg Finance L.P., FCA Alternative Investment Fund Managers Directive (AIFMD), Firm public disclosures, LCD, an offering of S&P Global Market Intelligence, Morningstar, National Association of Insurance Commissioners, Securities Industry and Financial Markets Association, Solvency II submissions and Bank calculations. Notes: (a) Estimates of the total stock are based on Bloomberg’s definition of leveraged loans. Given the lack of a consistent definition of leveraged lending, there is uncertainty over the total stock of outstanding leveraged loans. (b) For loans that are distributed to non-bank investors and CLOs, allocation across investors is based on ‘bottom-up’ estimates of holdings from a range of sources. Hence, there is a significant proportion of institutional loans that are unallocated. (c) For hedge fund holdings of leveraged loans and CLOs we scale up holdings reported to UK authorities by non-EEA managed AIFs to reflect the size of the global hedge fund universe. This means these estimates are particularly uncertain. (d) Revolving credit facilities and amortising term loans are allocated to banks given that they are typically the holders of these facilities. This picture is consistent with wider developments in corporate credit. Non-banks account now for 56% of the stock of UK corporate debt.

It is our expectation that the board of directors and senior management of institutions to play their roles in ensuring that the compliance programme is fully implemented and that any money laundering and terrorism financing activities are promptly detected and reported. Hence, I urge all reporting institutions to improve both the quantity and quality of STR submitted. In the same vein, the FIU will continue to improve its feedback mechanism to reporting institutions. The fourth area is to give greater emphasis on compliance. This is important so as to improve the compliance level among the reporting institutions in order to preserve the integrity and stability of the financial system. More focus will be given to enhance and raise the compliance level among DNFBPs in view of the emerging risks. To this end, greater collaboration between the FIU and the various self-regulatory organisations would be pursued actively during the year. BIS Review 46/2009  3  The fifth and last area is to ensure that the enforcement of the AML/CFT regime should be achieved without undue increase in the regulatory cost. It is important that the controls in place are commensurate with the associated money laundering and terrorism financing risks and the risk mitigation measures are adequate. This underscores the progressive introduction of more risk-based approach in the national AML/CFT regime. I understand that this is among key topics to be discussed in this conference, and I am sure it will generate interesting discussions between the experts and the participants.