the bank ’ s sterling monetary framework has increased from 70 in 2007 to 139 and counting. and the collateral we will accept in our regular operations now extends from aaa bonds all the way to own name raw loans. changes such as these provided the basis for governor mark carney ’ s declaration that the bank of england is “ open for business. ” i think changes made since 2007 indicate that we are also “ open about our business. ” the winters report highlighted that ambiguity around the bank ’ s published liquidity insurance framework is rarely constructive. and the bank is committed to providing clarity around the circumstances under which it would provide liquidity in the event of market - wide or large idiosyncratic stress : • the bank ’ s red book 7 clearly sets out the aims and objectives of the sterling monetary framework with regard to the provision of liquidity insurance. • each smf participant has a “ relationship manager ” and we aim to give them clarity about the circumstances in which they can expect to borrow. • we have improved our external accountability by producing an annual report overseen by the bank ’ s court which assesses how the framework has performed relative to its objectives. but hardwiring the lessons learned from the last crisis into our operations will not necessarily provide the agility to provide the liquidity insurance that may be required in the future. for that reason, our approach to liquidity insurance continues to evolve : • in november 2014 we extended eligibility for membership of the sterling monetary framework to include broker - dealers and central clearing counterparties ( ccps ), giving non - banks access to our permanent liquidity insurance facilities for the first time. • the range of acceptable collateral continues to extend : we have started to approve pools of auto loans and invoice finance receivables as eligible collateral for the first time. and we have started work to ensure there are no technical obstacles to our ability to accept equities as collateral should the need arise. the bank introduced us dollar repo operations in september 2008, and their usage peaked at the equivalent of $ 86bn in october 2008. the bank also provided a peak of us $ 25bn to rbs via emergency liquidity assistance. the bank ’ s commercial paper purchase schemes opened in february 2009 with a peak usage of £2. 4bn. the corporate bond purchase scheme opened in march 2009, with a peak usage of £1. 62bn. plenderleith ( 2012 ) and winters ( 2012 ). http : / / www. bankof

bank should empower its staff and must always remain credible with the public. ( even though bagehot foresaw many things, even his liberal mind hadn ’ t foreseen the day when the bank would have more than one deputy governor, and among them a woman! ) 3. a balance sheet that has evolved to meet the needs of monetary policy from a £1. 2 million loan to the government in 1694, the bank ’ s balance sheet has grown a long way to its current size of £400 billion. as figure 1 shows, most of that expansion has come in the past 7 years, in large part reflecting the implementation of monetary policy since the financial crisis that started in 2008. maintaining credibility in the money we issue has been an objective of the bank from inception. since the early 1990s this has been pursued through an inflation targeting regime, and most of that period the tool of choice for monetary policy was interest rates. in the wake of the financial crisis and ensuing recession, however, bank rate was cut to a historic low of 0. 5 % – a level that was at the time considered to be the effective lower bound as further cuts could reduce the profitability of the banking sector and constrain the supply of credit to the economy. when more stimulus was needed, the mpc used a different tool – the asset purchase facility – to deliver the needed stimulus by expanding the balance sheet using newly created central bank reserves to purchase £375 billion of government bonds with a range of maturities out to 55 years. of course what was once considered radical has become mainstream by today ’ s standards. indeed other central banks have gone further as the circumstances of their economies have dictated. the european central bank and the bank of japan have stated their intention to purchase significant amounts of private sector assets, and some central banks have used their balance sheets to purchase other countries ’ assets with the aim of maintaining their exchange rate at a certain level. the key point is that even though interest rates had been the marginal tool of monetary policy for several decades, monetary policymakers never forgot that this was only one manifestation of the central bank ’ s unique ability to create narrow money. and when the effective lower bound was reached, stimulus could continue to be provided by expanding central banks ’ balance sheets in new ways. someone recently said to me that quantitative easing ( qe ) is “ like magic, ” as if central bankers are sorcerers with the capacity to conjure up economic miracles. i wish. in fact