building the infrastructure to realise fintech ’ s promise speech given by mark carney, governor of the bank of england international fintech conference 2017, old billingsgate 12 april 2017 i am grateful to nicola anderson, sharmista appaya, alice carr, helen george, andrew hauser, rosey jeffrey, varun paul, gregory stevens and iain de weymarn for their assistance in preparing these remarks. all speeches are available online at www. bankofengland. co. uk / speeches introduction it ’ s a pleasure to be in this historic setting at the heart of the world ’ s leading international financial centre and its global hub for fintech. such leadership reflects the uk ’ s inherent strengths : its people, law, language and time zone. and it is testament to the city ’ s fundamental belief in markets and innovation. over the centuries, we have learned that markets and innovation thrive with the right hard and soft infrastructure : hard infrastructure ranging from transport links to broadband and payments architecture ; and soft infrastructure from the rule of law to market practices, codes of conduct, and regulatory frameworks. - - - - - - - - - - - - - - - - - - - - - - - - - - when horace jones was re - imagining old billingsgate market, britain was in the throes of its second industrial revolution – a time of mass innovation that changed the way people lived, worked and interacted. throughout the nineteenth century technological advances – including steam, electricity, and the telegraph – fostered new industries and made possible an unprecedented openness to trade, people, and ideas. london ’ s financiers, book keepers and lawyers provided the capital, infrastructure and know - how to support these trends, cementing the city ’ s status as the leading international financial centre. the result was an unprecedented surge in prosperity. while uk real gdp merely doubled during the eighteenth century, it increased 7 - fold during the course of the nineteenth century. there were risks alongside such growth. the century was punctuated by a succession of crises and a lost decade. it took decades to develop the necessary soft infrastructure to support more sustainable growth. indeed only by the late 1800s did the bank of england assume its vital roles as lender of last resort and informal supervisor of the banking system. similarly, around the turn of the millennium during the third industrial revolution, a series of technological innovations – including a revolution in computing power, the internet, and mobile telephony –

that we largely take for granted. one is that wherever we hold our money – in bank accounts, notes and coins etc – we can be assured that it all has the same value – the pound in my bank account equals the pound in your account. in other words, money is exchangeable at par value. i will come to the case of what happens when a bank fails. the second foundation – finality of settlement – means that when we pay for something we can rest assured that it actually has been paid for. these may seem like obvious things that we take for granted, but that is only the case because we have confidence in the basics of money. and that's what central banks look after. at the bank, as well as monetary policy to maintain the value of money through 2 / 7 bis - central bankers'speeches low and stable inflation, we regulate banks, and payment and settlement systems, we issue bank notes and we operate critical parts of the payments infrastructure, all of which contribute to these two key principles of money. there is a lot going on in the world of money, so let me set out some of these developments and where they may lead to. recent events – the failure of a number of banks in the us and in switzerland, and the consequence here of the resolution of the uk subsidiary of silicon valley bank – raised two questions over the singleness of money. as bank deposits are money, how far does it extend and what steps need to be taken to ensure confidence is maintained? an important qualification to what i said a few moments ago is that the setting of a deposit protection limit – £85, 000 in this country – means that in the event of a bank failure, money held on deposit in a failed bank above that limit may not retain all its value. as was clear in march, what happens to the money of customers who hold over that limit – and therefore the extent to which that money remains singular – is less certain and depends on how a resolution is executed. but is this sustainable in the event? we know now that the us authorities decided in the events of march that confidence in the singleness of money had to be preserved, and so they used something called the systemic risk exemption for a number of banks to extend depositor protection which, in reality, means taking steps to ensure all of the funds lodged in those failed banks remained money. the term systemic risk is important, because their concern was that a breach of the singleness principle for large deposits