not accelerate actions that could frustrate a resolution to the detriment of all parties. and the public needs to have confidence that we have learned the lessons of the crisis : that we have acted to ensure that we have an alternative to the previous crisis where we had privatisation of bank profits in good times and the socialization of bank losses when things go wrong. for that reason, the bank committed to parliament in april 2017 and in the purple book last october that from 2019 we would implement public reporting of banks ’ resolution plans and our assessment of their effectiveness. this marks an important transition in the implementation of full resolvability in the uk. for resolution to have maximum effectiveness, banks not only need to be able to meet the policy standards and have sufficient loss absorbing capacity. they need also to have the capabilities to be ready to implement a resolution, the legal and operational arrangements in place to avoid disruption to customers. it needs to be possible to restructure a firm so that it can be made viable post - resolution. so the next phase of work will focus on ensuring that major banks have and are able to demonstrate that they have the systems, documentation, assurance and controls necessary to support their resolvability. we intend to consult at the end of this year on the detail of this reporting and assurance framework. we envisage that it will require major uk banks to conduct a self - assessment of their resolvability – measured against the policies and standards that have been established nationally and internationally. in line with our commitment to parliament, we would then publish our assessment of resolvability for the major uk banks, providing greater transparency over the key judgments of the bank as resolution authority. in a similar vein the bank envisages we may require that elements of firms ’ self - assessments are made public – this would enable firm - specific progress on resolvability to be made more transparent. it is important to emphasise that this is the next step in the natural evolution of the resolution regime in the uk. the bank has been formally assessing the resolvability of uk firms since 2014. we do not intend start over again nor that firms should do so. the majority of policies and standards are in place and firms have made bank of england ’ s submission to the tsc capital enquiry http : / / data. parliament. uk / writtenevidence / committeeevidence. svc / evidencedocument / treasury - committee /

members would otherwise face directly and at far greater cost. again, the comparison with banks is instructive. writ large, the objective of recovery and resolution are the same for systemically important banks as they are for ccps – to ensure the maintenance of critical economic services during stress. but the similarity pretty much stops there. the main challenge with a bank that has exhausted too much of its prefunded loss absorbing resources – ie its capital - is to be able to bail in resources and to reduce its liabilities. by contrast, if pre - funded resources at a ccp are insufficient to absorb losses, the ccps is able to bail in more resources from its members to absorb losses. if that is insufficient, unlike banks, it is able to reduce its liabilities – ultimately to zero. all of this would happen outside insolvency. and it would be “ orderly ”, in the sense that it would be a prescribed sequence of action that has been pre - agreed between the members of the clearing house and within contractual arrangements between clearing members and their clients. given the scale of the loss absorbing resources held by and available to ccps and the fact that their rulebooks provide ultimately for their wind down outside insolvency, some have argued that while resolution is relevant for banks, it is simply not a relevant concept for ccps. all speeches are available online at www. bankofengland. co. uk / speeches i see some force in this argument. certainly, as far as loss absorbing resources are concerned i do not believe that it is likely to be justified to require ccps to hold an extra shot, in the form of bail in debt – to enable them to replenish their own resources. if, following the default of more than two major wholesale financial market institutions in stressed market conditions, the margin held by the ccp, the default fund, and further cash calls on the membership have been insufficient to meet the losses, we will have gone considerably further into the tail of systemic stress events than we have experienced before or that we require banks to withstand. in those circumstances, a reload of the ccp ’ s resources by bailing in debt is unlikely to resolve the problems. on the other side of the ledger, holding bail in debt would be of no other use to a ccp but could put up materially the cost of clearing. all else equal, this would be passed onto the users of clearing, reducing incentives to use the risk reduction that