The costs to society from the crisis were substantial.1 By 2013, unemployment had risen by 10 million and EU GDP was some 13% below its pre-crisis trend.2 The build-up of excessive leverage in the financial system was a key element leading up to the financial crisis, and policymakers were unable to adequately address systemic risk. While many central banks communicated on financial stability issues prior to the crisis, very few countries had established national macroprudential authorities with a specific mandate and precise instruments for policy action. Some of the tools that we would today call macroprudential instruments were used by central banks in Europe during the post-war period, albeit usually for the purpose of demand management.3 But most were no longer used or were dismantled by financial deregulation during the 1980s and 1990s. And without means of enforcement, warnings published in financial stability reports prior to the crisis often went unheeded. It was only after the crisis that there was widespread recognition of the importance of the macro dimension of financial stability. 4 An internet search on the word “macroprudential” yields 5,000 hits for the eight-year period from 2000 to 2007. By contrast, the past eight years yield 120,000 hits. Despite that recognition, macroprudential policy in Europe was far from operational in 2011. Indeed, when the European rules establishing a common legal basis for macroprudential instruments for banking came into effect in January 2014, ten Member States still had not implemented them in primary national legislation.

8  BIS central bankers’ speeches  Boston Evening Transcript (1892), “English financier honoured – Reception to William Lidderdale in New York” available at http://news.google.com/newspapers ?nid=2249&dat=18921117&id=s5E-AAAAIBAJ&sjid=SloMAAAAIBAJ&pg=5019,4090185 Bowman, W D (1937), “The Story of the Bank of England – From its foundations in 1694 until the present day”, Herbert Jenkins Ltd. Boyle, A (1968), “Montagu Norman: A biography”, Weybright and Talley. Capie, F, Goodhart, G, Fischer, S, Schnadt, N (1994), “The Future of Central Banking”, Cambridge University Press. Capie, F (2010) “The Bank of England: 1950s to 1979”, Cambridge University Press. Clapham, J (1958), “The Bank of England, A History Vol. 2 1979 to 1914”, Cambridge University Press. Crockett, A D (2000), “Marrying the micro- and macro-prudential dimensions of financial stability”, speech at the Eleventh International Conference of Banking Supervisors available at http://www.bis.org/speeches/sp000921.htm Galati, G and Moessner R (2011), “Macroprudential policy – a literature review”, BIS Working Papers No 337. Geddes, P (1987), “Inside the Bank of England”, Boxtree Ltd. Goodhart, C A E and Crockett, A D (1970), “The importance of money”, Bank of England Quarterly Bulletin, June, pp 159–98. Hennessy, E (1992), “A domestic history of the Bank of England, 1930–1960”, Cambridge University Press. John, S, Roberts, M and Weeken, O (2012) “The Bank of England’s Special Liquidity Scheme”, Bank of England Quarterly Bulletin, March, pp 57–66. . Kynaston, D (1994), “The City of London Vol. I – A World of Its Own, 1844–66”, London. Kynaston, D (1994), “The City of London Vol. II – Golden Years, 1890–1914”, London.