These challenges have been compounded by deeper forces that have radically altered the balance of saving and investment in the global economy.4 In the process, these have moved equilibrium interest rates into regions that monetary policy finds difficult to reach. Whether called “secular stagnation” or a “global liquidity trap”, the drag on jobs, wages and growth is real. Chart 1 Geopolitical risk doubled, on average, after 9/11  Source: Bank calculations and Caldara and Iacoviello (2016), ibid. Less visible, but more fundamental drivers of economic uncertainty are the powerful forces arising from technology and globalisation. The integration of 40% of humanity into the global economy has re-orientated production, eliminated jobs and may have depressed wages. These dynamics have been accompanied by the implications of technology for the  2  These are distinct from other types of uncertainty familiar to economists, including model uncertainty (uncertainty about the empirical properties of models as descriptions of the world), or to policymakers, such as the long and variable lags involved in the effects of monetary policy. 3  Economists have recently attempted its measurement by examining the frequency of newspaper articles containing terms like “geopolitical tensions”, “terrorist threats”, and “war risks” in a sample of global newspapers. See Caldara, D and Iacoviello, M (2016), “Measuring geopolitical risk”, Federal Reserve Board, mimeo. Political scientists have also constructed similar measures though, it seems, at lower frequency. For an application see for example Berkman, H., B. Jacobsen, and J.

First, we plan next year to enhance the Security Requirements in the CRM to align to the globally recognised National Institute of Standards and Technology (NIST) Cybersecurity Framework.8 The new requirements would align with NIST’s principles of Identify, Protect, Detect, Respond and Recover, and will be more outcome focused, balanced with prescriptive requirements when necessary. This will increasingly enable Direct Participants with different resources and business models to apply their own methodology to comply, thus supporting our strategy to allow a diverse range of financial institutions to use CHAPS. Second, the CHAPS rulebook clearly defines the Bank’s expectations around Direct Participants’ incident management approaches and reporting obligations. As I mentioned earlier, the FCA has observed a significant increase in technology-related outages across the financial industry. And for the first eight months of 2019, there were around half a dozen CHAPS Direct Participant incidents a month. The CHAPS rulebook provides an effective and timely means to manage risks through a focused root cause analysis, assignment of appropriate remediation plans and trend analysis to inform our assessment of the risks to the end-to-end CHAPS system. In line with the FCA’s analysis of incident reports,9 we have found that weaknesses in how changes are managed is a key driver behind nearly half of all CHAPS participant incidents. We are therefore revising the controls that Direct Participants should have in place in order to target areas that have contributed to incidents, for example, single-input of static data.