continue to be the most appropriate and efficient arrangement for allocating resources and bringing about adjustment. from this perspective, there is no real alternative to the present basis for financial intermediation, both domestic and cross - border. however, this firm belief should not blind us to the inherent vulnerabilities which characterise financial markets. i therefore now propose to explore for a few minutes the approaches we may take to find solutions to these market failures. information first, how to ensure that market participants have adequate access to the information they need? an impressive list of recent initiatives in this area can be put together. the efforts have moved in three distinct directions. some have been aimed at improving participants ’ appreciation of the risks in the macroeconomic environment. the imf ’ s special data dissemination standard is an example of this kind of initiative, as are efforts to improve the consistency of international reserve data. others have sought to increase our understanding of the potential implications of the build - up of market positions and price trends in particular markets ; examples of this effort are the more timely international banking statistics provided by the bis. still others aim at sharpening awareness of the creditworthiness of counterparties ; the work of private sector groupings in laying down more rigorous counterparty credit guidelines should improve disclosure practices in this area. but rather than elaborate on specific initiatives, i would prefer to make two more general observations. first, unlike what financial news services would like us to believe, the main issue that confronts us is not so much to generate more information, but better information. relevant, clear and comprehensive information, and its efficient disclosure and dissemination, are what is called for. from the point of view of the authorities, the challenging task here will be to transmit the correct guidance to financial markets and participants. blanket guarantees and time - inconsistent commitments to exchange rate targets have all too often been part of the messages which the authorities have conveyed to financial markets. the recent crises in much of the emerging world have shown how counterproductive, if not disastrous, this market guidance can be. my second point is that not only do we need to consider carefully what the right information is, we also have to put in place the appropriate incentives for participants to use and disclose it. awareness of this incentive issue can be found in the proposed revision of the basel capital accord. for instance, sovereign risk weights are expected to be lower for those countries which have reached internationally accepted standards with respect to data dissemination. more importantly perhaps, the new accord ’

ways that magnified those loan losses. this phrase was used by my colleague, martin taylor, in evidence to the treasury committee of the house of commons : “ being an fpc member is one of those jobs, more common nowadays than before, where one is charged with worrying. i find this comes quite naturally – it ’ s worrying intelligently that ’ s hard. ” all speeches are available online at www. bankofengland. co. uk / speeches complacency gave way to crisis. confidence in the banking system was destroyed. although public bailouts – totalling $ 500bn across the g10 – shored it up, banks took emergency measures to protect themselves. the supply of loans collapsed. companies and households were unable to refinance their debts. the result was economic disaster. in this country alone, close to a million jobs were lost and more than 100, 000 businesses failed. too much debt made the financial system, and the economy, unsafe. too many people paid the price when those risks materialised. since then there has been a programme of repair and reform. britain ’ s households have paid down debt. the financial system has been made safer, simpler and fairer. banks, in particular, are much stronger. british banks have a capital base – their own shareholders ’ money – that is more than 3 times stronger than it was ten years ago. they can absorb losses now that would have completely wiped them out ten years ago. during the repair of banks, there were suggestions that the repairs would hold back lending to the economy. that ’ s a bit like arguing that stopping to repair a punctured tyre holds back your progress towards your destination. only once the puncture in the banking system was repaired was it able to get back to serving the economy. with stronger banks, credit is flowing again, helping businesses with new ideas and families looking for a home. in the past 2 years, lending by banks has grown in line with the economy : credit supply looks neither too cold - as it was after the crisis - nor too hot - as it was in the build - up to the crisis ( chart 1 ). carney ( 2017 ) ‘ fsb chair letter to g20 leaders – building a safer, simpler and fairer financial system ’, 3 july. http : / / www. fsb. org / wpcontent / uploads / p030717 - 1. pdf all speeches are available online at www.