##en levina, harsh mehta, tabitha rendall, nyssa roberts, matthew waldron and danny walker for their helpful input and comments. the views expressed here are not necessarily those of the financial policy committee. 1. my focus today is on risks from private non - financial corporations ( pnfcs ), but risks from the corporate sector can, and historically have, also arisen through commercial real estate ( cre ) exposures. we stress test uk banks to ensure they are well capitalised to declines in cre prices and to continue lending in a severe downturn. 2. micro companies are to companies with less than £316, 000 in total assets. 3. there is some evidence that pension funds behaved counter - cyclically during the gfc for example. 4. the annual remit letter from the chancellor sets this out in detail. 5. the survey will be run by a polling company on behalf of the bank of england. we hope to launch it in the next few months. sarah breeden executive director, financial stability strategy and risk ©2023 bank of england

at http : / / www. nber. org / papers / w18315. see phelps e ( 2013 ), mass flourishing : how grassroots innovation created jobs, challenge, and change, princeton university press, princeton. see mokyr j ( 2013 ), “ is technological progress a thing of the past? ”, eu - vox essay, 8 september. available at http : / / www. voxeu. org / article / technological - progress - thing - past. bis central bankers ’ speeches i don ’ t profess to know which of these views is correct – only time will tell. what underlies these debates though is that the ability of a society to innovate, to take and manage risks and to respond quickly to the changing world helps determine the rate of productivity growth. improvements in productivity require existing resources to be used more efficiently or advances in technology – they do not occur from doing the same thing over and over again without change. so if we are to improve efficiency and advance technology then innovation is required and innovation requires someone to take a risk – the risk of trying a different process, the risk of changing workplace organisation and management practices, or the risk of spending scarce resources to explore a new idea. sometimes the effort will not pay off, but just occasionally it will, and when it does, we find a better process, a more efficient organisational design or an idea that transforms how we do things. the point i want to emphasise here is that regardless of whether the techno - pessimists or the techno - optimists turn out to be correct, our attitudes to risk - taking, to innovation and to entrepreneurship have a significant influence on our future living standards. at this point, i would like to return to one of the questions i asked you to think about at the beginning : how has our society ’ s attitude to risk and innovation evolved over time and what are the implications for productivity growth? my own tentative answer is that there has been a subtle, but important, shift in the way we think about risk and innovation. in particular, our preferences appear to have shifted in such a way that we increasingly focus on risk mitigation and risk control. there are examples of this in a whole range of activities in our society – from the nature of the legislation that parliaments pass, to the increase in compliance activities in the nation ’ s boardrooms, to the amount of money we are prepared to spend to limit the probability of blackouts