3  All speeches are available online at www.bankofengland.co.uk/speeches  3  During the 18th century, regional banks acted as venture capitalists, providing equity to power the first 3  industrial revolution. In the mid-19th century, the City underwrote vast issuance of railway securities, spurring the creation of stock exchanges and the development of modern capital markets. 4  During the first wave of globalisation in the 19th century, the development of correspondent banking and 5  trade credit services drove an explosion in global trade, hedged by a step change in activity in the Lloyd’s 6  market. During the second wave of globalisation in the 20th century, London quickly embraced new information technologies, becoming the first major centre to adopt electronic trading. The UK’s openness to foreign currency banking, beginning with the creation of the Eurodollar market, spurred a renaissance of global capital flows. This financed enormous efficiencies through new global supply chains and unprecedented prosperity by opening up emerging markets. 7  Throughout the centuries, it’s been clear that private innovation works best when it is grounded in the right public infrastructure. That includes hard infrastructure – from liquidity facilities to payments architecture – and soft infrastructure – from the rule of law to up-to-date codes of conduct and effective regulatory frameworks. This infrastructure must be overhauled now that the economy is on the cusp of the fourth industrial revolution and our demographic challenges are intensifying. And rebalancing of the global order is proving as dramatic as it was in Montagu Norman’s time.

Implementation is now being regularly assessed and transparently reported by the FSB and the IMF. This second pillar is deep supervisory cooperation. To manage cross-border challenges to financial stability, international authorities must share relevant information and work together. As the home to four, and host to the other 26, globally systemically important banks, the Bank of England participates actively in all major supervisory colleges, sharing information and expertise gained from overseeing the multitude of complex risks unique to London. We expect the same from those whose firms operate and take on large risks here. The PRA’s open, cooperative approach to supervision means wholesale activity in London can remain globally-integrated and highly efficient, without compromising resilience. 12  The third pillar of responsible openness is ending ”too big to fail”. With enhanced resolution powers and planning, the Bank of England now has the ability to resolve failing banks. The UK’s major banks are on track to complete this year the ring-fencing of their critical domestic high-street businesses from their riskier wholesale activities. And they already hold loss absorbing resources of 25% of their risk-weighted assets against a 2022 requirement of 29%. As a consequence of this progress, market discipline is returning, with the public subsidy enjoyed by the largest banks having fallen by 90%. Now is the time to reap the benefits of these enormous efforts. Platforms are being created for deference to each other’s approaches when they achieve similar outcomes. With the three pillars in place, an open, resilient global financial system is possible.