of capital provided by wholesale banking activities across borders. efficient resilience is why we are building robust markets supported by the necessary hard and soft infrastructure. this is how we reinforce the city ’ s genius which is based on its fundamental belief in the power of markets. we have comprehensively reformed how we provide liquidity. our new approach can be described in four words : we ’ re open for business. the bank now provides liquidity against a wider range of collateral, to a wider range of counterparties, for longer terms, at lower fees than ever before. collateral totalling over £400bn is prepositioned, ready for use if needed including in times of actual or prospective stress – as was the case around the referendum last year. moreover, we stand ready to provide liquidity in a wide range of foreign currencies if required. efficient resilience is why we are committed to world class supervision of uk - based globally systemic financial market infrastructure. the uk has been at the forefront of implementing recovery and resolution regimes for ccps, well ahead of final international guidance. the bank pioneered global colleges for ccps. and we have introduced ‘ pre - funding ’ into our systemically important retail payments schemes, bacs and fps, to eliminate settlement risk. such initiatives have prompted the imf to conclude that ‘ the bank is one of the leaders worldwide in shaping reforms in this area ’. finally, efficient resilience is why the bank of england, working with the financial conduct authority, has been at the forefront of efforts to increase individual accountability in financial services. while the uk ’ s action plan to improve conduct includes stronger deterrents and reduced opportunities for bad behaviour, we recognise that ex post penalties are only part of the solution. the fpc judges the appropriate tier 1 capital requirement for the uk banking system, in aggregate, to be 13. 5 % of risk - weighted assets ( rwas ), as currently measured. this compares with around 10. 5 % including capital conservation and sifi surcharge buffers based on international standards. the bank has also introduced a leverage ratio requirement in advance of international requirements that currently amounts to, in aggregate, 3. 3 %. if resolution arrangements were not in place, the fpc is likely to have judged that the appropriate baseline tier 1 capital requirement for the uk banking system would be closer to 20 % of rwas than the current 13. 5 %. membership of the smf has risen from 70 in 2008 to

between the macroprudential regime we now have and the past is that the fpc will be steering and, once the legislation is complete, recommending and sometimes directing the microregulators to take action. that is a major change in the uk ’ s regime. and it will occasionally mean taking away the punchbowl, leaning against excess. no set of static regulatory requirements will suffice for all seasons. the fpc will be ready to alter regulatory requirements dynamically, so far as the constraints of eu legislation are consistent with actions to preserve stability. 1 conclusion the new social contract for banking insists on resolvability and on the health of the system as a whole. in doing so, the goal is to move towards a financial system that is able to keep lending even during dark times. rapid payout from deposit insurance ; liquidity provision against wider collateral ; constraints on shadow banking to limit regulatory arbitrage ; simplification of sifis ’ internal structures and practices to aid resolvability ; powers for resolution agencies to reconstruct the capital structure of a distressed bank or dealer, to avoid the disorder of orthodox liquidation ; a capital surcharge for sifis ; the fpc temporarily raising capital or liquidity requirements in the face of stability - threatening exuberance – these will all be parts of the new contract. it is unfinished business, but the shape should be clear by the time of the g20 heads of government summit in november. see tucker p m w, “ macroprudential policy : building financial stability institutions ”, april 2011. bis central bankers ’ speeches as you can see, the lessons of the crisis fall into two broad groups : repairs and revolutions. the changes in capital and liquidity regulation, however big, are essentially repairs. they improve on what was there before. there are revolutions on two fronts. resolution regimes. and macroprudential regimes. as i have explained today, both will have a profound influence on supervision. indeed, it is no exaggeration to say that, in the uk, the approach of the future prudential regulation authority to banking supervision is being framed by the needs and goals of resolution and macroprudential oversight. supervisors will focus to a much greater extent than ever before on coping with failure and on the stability of the system. that will become apparent in the years ahead. bis central bankers ’ speeches