but all were significantly better than the choices we faced in the 2008 crisis. but while the progress has been significant, i am convinced that some additional tools are needed to fill out the resolution framework. this reflects my experience of operating the regime – both through the recent, high - profile failures, and other less dramatic exits of smaller firms over the past decade. if we don ’ t learn as we go along, we will become less effective in future stresses. depositor continuity the first reform i want to highlight is around access to deposits in a bank failure. we already have a system of deposit insurance – meaning insured depositors will not suffer any financial loss if their bank fails, up to a limit of £85, 000. but while important, that in itself does not guarantee that all depositors can continue to access their money the day after every sort of bank failure. in some cases, a lack of continuity of access may have important ramifications. for instance in the case of svb uk, where many smes, particularly concentrated in the tech sector, faced the risk of not being able to make payroll on monday morning. in the event, that risk was averted by the sale of the firm to hsbc. but we cannot guarantee that a willing buyer will be available so quickly in all future cases, and there are all manner of complications that can scupper a rapid acquisition. for firms above a certain size we already have another means of providing depositor continuity. by writing down the value of long - term debt held by the firm – a ‘ bail - in ’ – we can quickly recapitalise the firm after it has failed, replace its management and begin the process of restructuring its business over a longer time horizon, while maintaining depositor continuity without a bail - out. but smaller banks do not have the kind of bail - in debt – referred to as mrel [ 18 ] debt – that is needed to pursue that strategy. in those cases, the only current option to keep a failed firm open would be having the bank of england take over the firm directly. this option is entirely workable but comes with the risk that any losses from the firm would eventually end up being passed to the taxpayer – exactly the kind of bailout we want to avoid. we are therefore exploring with hmt options to maintain continuity of access to deposits in resolution for smaller firms, in a way that minimises the risk to public funds. i have no doubt that there will

ukraine. the detailed story of both failures has been told elsewhere. both firms failed when depositors lost confidence in them, and began to pull their money out rapidly : silicon valley bank was a relatively familiar story : a firm that took a very large interest rate risk, which got caught out when rates started to rise. it held very large unrealised losses on securities held for liquidity purposes, and when it did have to sell those assets to meet its liquidity needs, it began to realise those losses in a public and painful way. it tried and failed to raise capital to plug the hole, and the failure of that capital raise proved to be the final straw for depositors, the majority of whom were uninsured. credit suisse also suffered a loss of confidence, but the reasons were broader. a persistent lack of profitability, and serious recurrent conduct and risk management failures, led many to question the firm's viability. ultimately a significant run began to develop over late 2022. and in the febrile days after svb ’ s failure, the firm made an announcement related to its published accounts and a significant cs shareholder implied publicly that they would not stand behind the firm in a stress – at which point the erosion of cs ’ s deposit base turned into an unstoppable avalanche. once the stress happened, authorities needed to act quickly to deal with the situation. this was a moment of genuine risk : notwithstanding the overall strength of the banking system, a botched resolution could have seriously dented confidence. and it was certainly a rocky ride for those involved, including depositors, employees and other stakeholders of the affected firms. but in the event, the system worked. we experienced the failure of two large banks – one of which was considered ‘ globally systemic ’, and both of which had material uk operations – without a systemic crisis. svb was successfully resolved, and cs was rescued in a transaction that was economicallysimilar to a resolution, without the need for a bailout. [ 5 ] resolution and resolution - like powers were used to ensure that private investors, rather than taxpayers, paid the price for failure – as it should be. depositors, and other customers and counterparties, were able to continue to access vital services following interventions by the authorities. contagion to the global banking system was limited. following the failure of svb, we did see some evidence of stress – and some further failures – in particular in other regional and mid