is. certainly it does have to do partly with history. the emergence of the city owed a good deal to britain ’ s earlier position as the world ’ s leading industrial and trading nation and international power. but that does not explain its continuing strength. to explain that there are lots of factors one might point to - the english language, the european time zone, the sheer momentum of the city ’ s critical mass, supported by the availability of a professionally - qualified and technically - skilled work force which gives the city remarkable resilience and flexibility, aspects of our commercial and physical infrastructure, and so on. all of these factors are certainly relevant factors. but if i had to identify one factor above all that helped to explain the continuing phenomenon of the city, it would be what i can only rather vaguely describe as the surrounding ethos of a free, competitive, market place. i do not at all mean by that that the city is a lawless jungle where anything goes! in fact quite the reverse. you cannot have an effective competitive market without reasonably clear rules of the game, both to protect society as a whole from disruption and to retain the confidence of both the providers and users of the market by ensuring that they know what is expected of them and what they can reasonably expect of others. the evolving legal and regulatory framework in this country, together with the self - regulatory disciplines applied by the relevant market organisations and professional bodies have been - and remain - a vitally important asset for the city in this context. it is not just the structure of these arrangements but their substance and the manner of application of the rules of the game that matters. it is all too easy to err on either side. the rules may be so loosely drawn that market participants and market users lose confidence and go elsewhere ; or they may be so tightly drawn that they discourage competition and inhibit innovation. equally, the actual, as distinct from the intended, balance between social protection and fairness on the one hand, and competition on the other, may be affected by the approach adopted by the various arbitrators. theirs is a difficult job at the best of times. we ’ ve all seen matches ruined by either unduly lax or unduly officious refereeing. but ultimately the character of the game depends upon the self - discipline, as well as the skills, of the players. in general i believe that we in this country have been well served in these respects. there has been relatively little systemic disturbance in

the new millennium in the face of these challenges. how successful we are in confronting them will depend, as in the past, upon the interaction of the technical and professional skills and self - discipline of the market and the structure, substance and application of the rules of the game as they are reflected in public policy. we have unique experience within the city on which to build. the market has repeatedly demonstrated its capacity to respond successfully to new challenges and currently attracts representatives of the strongest participants from all parts of the world. it is supported by very highly qualified professionals and professional bodies which play an important role in setting and maintaining standards. it is supported, too, by an extraordinary range of specialist professional and technical organisations, which help to ensure that the rules of the game are sensibly formulated and clearly understood. and it is supported by a very strong tradition of technical training and education through the various financial institutes, a tradition which i hope may soon be bolstered by the development of a coherent set of professional qualifications across the different financial market sectors. but how far we remain successful will depend importantly, too, on how far we are able to maintain what i have described as the ethos of the competitive market place in a rapidly changing environment and that will represent a considerable challenge to public policy. given market self - discipline, i have every confidence, mr chairman, that the various competent authorities will remain constructive and impartial in their approach to defining and applying the rules of the game, and open to innovation and wide participation, so that the city retains its position as an attractive location for the provision of financial and business services. so, mr chairman, i look to the future of the city with very considerable confidence. on recent form it has little to fear and great opportunities to look forward to. but i don ’ t say that it will be easy.