uk - based electronic share - trading system tradepoint. whatever the outcome of these alliances and ventures on the infrastructure of equity markets will be, equity portfolios of private and institutional investors in emu member countries will diversify internationally, due to the elimination of exchange rate risk. this trend can already be seen among german mutual funds that invest in equities. those funds focusing on german equities suffered a reduction in their overall amount of funds under management of 1 billion euro in the first half of 1999, whereas funds investing in shares representing the whole of the euro area raised additional capital of 2. 4 billion euro in the same period. this trend is quite likely to continue and, possibly, accelerate. iii. the euro will also act as a catalyst on the banking sector of the new currency area. increases in capital market activities facilitated by greater market size are likely to foster securitisation and disintermediation. classical bank lending is likely to suffer from this trend, which has already run its full course in the anglo - saxon countries. this kind of structural change in the banking industry will have winners and losers. this will certainly be so among corporate bank customers in germany. as a general rule, small companies will find it harder to get access to bank credit than in the past, whereas larger companies may see their credit conditions improved including the possibility of direct access to capital markets. whether such a system, on balance, is superior to the traditional relationship banking, which is still dominant in germany, is hard to say. one of the problematic aspects of the capital market system versus traditional bank lending could be studied in the us a year ago, when spreads for many medium - sized american companies ( in the wake of the ltcm crisis ) widened to such an extent that these companies were virtually cut off from external finance for several months. in systems with a strong and diversified basis of classical bank lending, “ mittelstand ” companies, in general, will at all times find access to bank credit. to be sure, i do not believe that bank lending will be seriously threatened as a consequence of structural change driven by global trends and facilitated by the common currency. however, i feel that we need to watch this process of change carefully with a view to making sure that a banking structure that is ready to provide long - term finance to the many small and medium - sized companies remains intact. the enlargement of financial markets due to the bigger currency area is likely to increase concentration in the banking

charles bean : quantitative easing and the economic outlook speech by mr charles bean, deputy governor for monetary policy of the bank of england, to the scottish council for development and industry, glasgow, 21 february 2012. * * * good evening! i doubt that many of you will be aware that the bank of england was actually founded, in 1694, by a scotsman named william paterson. our original purpose was to raise the funds to enable the king to finance his foreign military adventures. but paterson soon parted company with his fellow directors, leaving the bank the following year. rather more of you may be aware that same william paterson became the financial brains behind the darien scheme, a project to establish a scottish colony in panama that could act as trading post between the atlantic and the pacific. unfortunately, just about everything that could go wrong with the project did, resulting in not only the deaths of many of the colonists, but also substantial financial losses for the many scottish people who had backed the scheme. according to historians, the darien disaster and its financial consequences contributed directly to the pressures leading to the 1707 act of union between england and scotland. the possible dissolution of that union is, of course, now on the agenda. whether or not scotland becomes an independent country once again is a matter for the scottish people to decide. if the referendum should result in a vote in favour of an independent scotland, the associated monetary arrangements would then be one of many matters needing to be settled. but the exact form of those arrangements would be for the westminster and scottish parliaments to decide, not the bank of england. until asked to do otherwise, the bank will continue to use the powers delegated to us by the uk parliament to try to deliver, to the best of our ability, monetary and financial stability for the united kingdom as it stands, including being represented here through our agency in scotland. in keeping with that, my remarks tonight will focus not on what may, or may not, happen to the uk ’ s monetary arrangements some years down the road, but rather on our more immediate economic prospects and the actions that the bank ’ s monetary policy committee has taken to try to sustain the recovery. as you will be aware, last october the monetary policy committee resumed its purchases of government debt, financed by the issuance of additional claims on the bank of england – so - called quantitative easing. at our most recent policy meeting less than a fortnight ago, we voted to make a further £50 billion of purchases,