gilt holdings in a timely but orderly way gave confidence that there would be no lasting impact on the bank ’ s stock of gilt holdings – the variable voted on by the mpc during qe. [ 16 ] unwind was completed using an innovative demand - sensitive approach over a period of four working weeks – broadly the same time it took to run up the holdings. the operation was targeted only at those assets involved in the ldi adjustment – long - dated conventional and ( in the latter phases of the operation ) index - linked gilts, whereas qe operations took place across the ( conventional ) curve ; and the operations were subject to a system of backstop reserve pricing, aimed at ensuring we purchased only as many assets as required to resolve the financial stability issue and recatalyse the market. this was a fundamentally different approach to that taken in qe, where the goal was to achieve the mpc ’ s stock targets. as a consequence, our eventual total purchases were far lower than some early estimates – and that, combined with the short holding period, very clearly differentiated the ldi operations from the much larger and more persistent path of qe holdings ( figure 4 ). judged against the criteria we set ourselves, these operations were highly successful, a view supported by most market participants and commentators. but there were many important learning points for us, and for anyone contemplating such operations in the future too. the first is simply to underscore the value of effective preparation across every element of design. as i mentioned at the start, we had benefited substantially from the thinking of the bis working group in the months ahead of the ldi crisis. establishing and communicating a rigorous approach to governance is critical. ensuring your operations genuinely are temporary is a vital but high stakes decision : make sure your deadlines are credible and clearly communicated. most importantly of all, invest heavily in how you want to price your facility. the standard mmlr theory of operating at a spread wider than in normal market conditions but narrower than in stressed conditions is nice in theory. but a spread is only defined around some mid - price, whether market or model - determined – and the former may simply not exist in dysfunctional markets, leaving it hard to avoid being a price setter, whether you like it or not. we found ourselves coming close to this in our index linked gilt purchases, where a near - complete lack of liquidity required us to set an additional level of reserve pricing in levels terms ( a ‘ reference

! innovations in finance offer new opportunities to the financial sector. this may especially be the case in africa, where these innovations are perhaps less of a “ threat ” to the traditional banking sector than in “ overbanked ” europe. but even more important in my view are the benefits of innovation for consumers and businesses. new technology in finance brings more choice, lower costs and greater convenience for users. this not only holds for advanced countries with well - developed banking sectors, but certainly also for africa with its many remote areas and still many “ unbanked ” inhabitants. indeed, a sustainable and prudent development and use of new technologies in finance will help to further promote financial inclusion in africa. and this is of vital importance. for this relationship between financial inclusion and economic growth has been clearly established time and again. financial services are the lifeblood of an economy. access to financial services allows households to smooth out consumption and invest in their future. for businesses, access to credit enables them to expand and to create jobs. financial inclusion, in short, is one key for promoting strong and stable economic growth. innovations in finance are perhaps the most promising way to advance financial inclusion. that is why it is so important that new technologies in finance are being exploited in africa, as this will help unlock the continent ’ s massive “ unbanked ” population. for companies involved in supplying this new type of services this implies that they will continuously need to embrace innovative strategies. in this way, they will be able to shape financial products to fit consumers ’ rising financial sophistication needs. recent history suggests that african companies are able to do so quite successfully. kenya, for instance, has led the world in innovative financial services based on mobile telephony by introducing m - pesa and m - pesa - derived systems such as m - shwari and m - kesho. this has made several financial services available to anyone with a mobile phone at a fraction of the cost. exploiting innovations in finance is one. strengthening institutions is the other. one of the most fundamental questions in economic science is “ why are some countries richer than others ”? differences in the quality of legal, political and educational institutions between countries turns out to be an important part of the answer. indeed, the strengthening of such institutions often goes hand in hand with higher economic growth : countries with stronger institutions experience stronger economic growth compared to countries with weaker institutions. there are several reasons why this turns out to be the case. strong institutions