The quote from the Governor is taken from Carney, M. (2013), “The UK at the heart of a renewed globalisation”, speech at an event to celebrate the 125 th anniversary of the Financial Times, available at https://www.bankofengland.co.uk/-/media/boe/files/speech/2013/the-uk-at-the-heart-of-a-renewedglobalisation.pdf. 16 The three liquidity insurance facilities are: (I) Indexed Long Term Repo– for predictable/regular need for term collateral transformation; (II) Discount Window Facility – for firm-specific liquidity shock requiring liquidity in bespoke size and timing, with lagged disclosure; and (III) Contingent Term Repo Facility – for actual or prospective market-wide stress meaning SMF participants need cheap, plentiful cash at term. More information on the Bank’s facilities can be found in the ‘Red Book’ https://www.bankofengland.co.uk//media/boe/files/markets/sterling-monetary-framework/red-book . 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Prior to 2006, the Bank had just 17 members of its Sterling Monetary Framework. But liquidity needs are not just for the biggest banks & building societies. In recognition of this, we had already increased the number of members to 106 by 2012; today it stands at 207. 17  The crisis also revealed that liquidity shortages can materialise far beyond the banking system; and the financial system has continued to evolve since then. And so in 2014 we widened access to our facilities to include central counterparties and broker-dealers as well as banks and building societies.

And the second was what crystallised as a result – a loss of confidence in wholesale funding markets. Banks became uncertain of how creditworthy their peers were, and as a result they stopped lending to one another, and couldn’t fund themselves – a crucial need. The vulnerability in banks’ balance sheets sparked a crisis of liquidity and funding. These events prompted a wide-ranging set of back-stopping actions by the Bank of England and other authorities, both across the Bank’s own balance sheet, as well as deploying the Government’s. But despite these actions, we now know that the funding crisis, or “credit crunch”, helped push the US into recession in December 2007, with the UK following in summer 2008. 4  The financial crisis has left an indelible mark on financial markets; the hard lessons learned have changed the shape of finance for the better. Our banks are well-capitalised, with appropriately prudential liquidity  4  See for example Ben Bernanke’s new paper: Bernanke, B. 2018. “The Real Effects of the Financial Crisis” BPEA Conference Draft, Fall, available at https://www.brookings.edu/bpea-articles/the-real-effects-of-the-financial-crisis/ and summarised at https://www.brookings.edu/blog/ben-bernanke/2018/09/13/financial-panic-and-credit-disruptions-in-the-2007-09-crisis/. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  requirements. In the UK we are completing the ringfencing of our banks, to protect UK deposit takers from riskier investment banking activities. Resilience has been further strengthened by the increasingly central role of central counterparties (CCPs) for the trading of OTC derivatives, a global post-crisis reform.