mervyn king : monetary policy developments speech by mr mervyn king, governor of the bank of england, at the university of exeter, exeter, 19 january 2010. * * * some dates are easier to remember than others. 1789 and the french revolution, 1989 and the fall of the berlin wall, 1929 and the wall street crash are easily recalled. how will 2009 be remembered : as the year when the world economy fell off a cliff but was rescued by government and central bank intervention around the world? or the year when we finally recognised that genuine reform to the international monetary and banking system was essential to restore prosperity? time will tell. the world economy is now coming out of recession. but the cost of the banking crisis has been high. after an unprecedented period of sustained growth, total output in the united kingdom has now fallen for six consecutive quarters. it contracted last year by around 5 %, the largest fall in output since 1931. national income is around 10 % below the level it would have reached in the absence of the financial crisis. around the world, governments and central banks put a massive sticking plaster on the wounds in the form of an extraordinary degree of monetary and fiscal stimulus. as a result, business confidence, orders and output, which all collapsed at the end of 2008, are gradually recovering. but there is a long period of healing ahead. although quarterly growth rates of gdp may soon turn positive in the united kingdom, unemployment is likely to remain high. fortunately, it has not increased to the 10 % rate now experienced in both the united states and the euro area. but at just under 8 %, it is markedly above the level to which we had become accustomed during the period known as the “ great stability ”. the sharp monetary squeeze resulting from the efforts by banks to contract their balance sheets is still casting a shadow over the future path of output and employment. over the past year, broad money growth has slowed sharply to a virtual standstill in the united states, and it turned slightly negative in the euro area. in normal circumstances, we might expect annual rates of increase of between 5 % and 10 %. at home, annual broad money growth has slowed somewhat less sharply, and remains positive. the unprecedented actions of the monetary policy committee to inject £200 billion directly into the economy – described by some as “ quantitative easing ” – have averted a potentially disastrous monetary squeeze. the headline in the racing post of 29 december said it all : “ quantitativeasing maintains perfect record ”

across the sector is fairly limited. firms have been recently contacted about participating in the pilot survey on diversity and inclusion. we appreciate that firms are at different stages on the development of the diversity and inclusion data strategy and the purpose of this survey is to understand better what data firms currently collect about their workforces. we are especially keen to receive feedback on the challenges of collecting diversity and inclusion data. i would like to take this opportunity to encourage you to participate in the survey as it may help to shape potential future regulatory returns, so the more information we can learn from firms, the better. it is particularly valuable to hear from small firms to ensure that we receive a representative sectoral response and it is important that the voice of the mutuals sector be heard in this discussion. climate change since our former governor, mark carney ’ s speech in 2015 on ‘ the tragedy of the horizon ’, the bank has been working with many other organisations, with our particular focus on financial stability, from physical and transition risks. our expectations for firms were set out in supervisory statement 3 / 194 and firms contribute to work on their implementation plans. firms should consider how they can assess the climaterelated financial risks associated with their clients and counterparties and have a clear high - level strategy for adapting to the range of potential climate outcomes. the pra is mindful of the need to take a proportionate approach and accept that smaller firms do not have the resources to develop as sophisticated an approach as larger firms. however, smaller firms are not immune from climate - related financial risk and could be more susceptible if they are particularly concentrated in a vulnerable sector, product or geography. as a guide, small firms and firms with smaller exposures to climate - related financial risk may focus more on a qualitative strategy for adapting to climate change without as much need for quantitative metrics to substantiate their approach, possibly relying on third party metrics. the expectation for small firms with material exposures would be more aligned with the expectations of medium and large firms. medium and 3 / 6 bis central bankers'speeches large sized firms, and firms with medium or large exposures to climate risk, should link business strategy changes to scenarios, identifying triggers to modify their strategies. therefore, an appropriate approach depends on the firm ’ s business model. a good starting point for smaller firms when undertaking scenario analysis might be to do a qualitative ‘ walk - through ’ scenario considering a possible sequence of events ( shocks and responses ) before