the difficulty in unpicking the firm ’ s exposures, given the large number of distinct but interrelated legal entities that fell under the lehman brothers corporate umbrella. the lei, a globally unique reference for each legal entity, recommended by the g20 and taken forward by the financial stability board, was one solution to prevent recurrence of this problem. see : http : / / www. fsb. org / 2012 / 06 / fsb - report - global - legal - entity - identifier - for - financialmarkets / for example, in the charity sector, being able to quickly establish the identity of other international organisations, and cross - check with permissions granted under sanctions licenses, should make sure that humanitarian funds go to the correct recipient quickly. likewise government could have the ability to more closely track contract awards and also make it easier to bring smes into tendering processes by establishing an accurate picture of smaller firms and their identities. it will also help financial institutions to improve existing aml checks, by being able to identify the full range of entities involved in the payments chain, which will provide a broader social benefit globally by helping stop fraud and terrorism. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx because of the benefits the bank sees in leis, our consultation response outlined that we will make them a mandatory feature of transactions between financial institutions in chaps. but in order to unlock the lei ’ s full potential we need to encourage the adoption of leis amongst all those who use payment messages, not just within the financial services industry, but in all sectors of the economy, including corporates. the opportunity of the infrastructure upgrade as part of rtgs renewal, and similar opportunities in future, could provide the appropriate levers to encourage this broader take up of leis - to maximise the benefits of this public good. engagement with key stakeholders13 is also vital - and we ’ re very pleased to be hosting a financial stability board workshop on leis here on 10 december. but, crucially, this means that both public sector and private sector will need to show concerted commitment, drive and leadership to deliver success. looking forward and this brings us back to why we are here today. the need for close private and public sector collaboration is why we sought your feedback through our consultation. and, it is why we, with pay. uk, have announced the standards advisory panel

iso 20022 – and the ccm – may unlock in 5 to 10 years ’ time. legal entity identifiers to seize the opportunities for future improvement, we need to examine where there might be existing inefficiencies. huw van steenis is currently leading a major project in the bank, vision 2030, to map out what the future of the financial system might look like and the role the bank can play in making the system as effective as possible for households and businesses in the uk. one of the themes that comes up repeatedly in our engagement is that the burden of identification is heavy – both for banks and businesses. all but the simplest of business transactions involve a chain of institutions in the financial network. across this chain there can be many unique ways of identifying a business, and because of that, there are manual checks and reconciliation processes involved every step of the way. a single, universally recognised identifier could dramatically improve the speed and efficiency of identification, by cutting out this manual process at every stage. which brings us back to the legal entity identifier ( lei ). the lei has its origins in the post - crisis financial market reforms pioneered by the international policy - setting and regulatory community11, serving as a means to better aggregate and monitor exposures ( amongst many other goods ) ultimately helping us preserve financial stability. the lei has particular features : it is a unique identifier, requires annual verification, carries useful information about company structure, and is a globally recognised iso standard. the bank believes it has all the right ingredients to deliver much wider benefits for end users – raising efficiency, competition and productivity. beyond the financial sector leis have the potential to be a transformative building block for the real economy. 12 with the lei as a critical building block, technology holds the promise of delivering efficiencies for end users of the financial system. rapid identification will enable efficient know - your - customer ( kyc ) and on - boarding processes. given the complexities of cross - border transactions, it could unlock substantial efficiencies for importers and exporters. and, it could one day enable a business to build up its own credit data file and use it to shop around for the best products, much like we do as individuals. our work suggests that a widely recognised and unique digital identifier for all businesses is foundational to delivering that future vision. following the collapse of lehman brothers, one of the key issues regulators had to tackle was