/ www. bankofengland. co. uk / news / 2018 / january / ieo - evaluation - of - the - boe - approach - to - providing - sterling - liquidity. see shafik, m. ( 2016 ), “ small is beautiful but big is necessary ”, speech at the bloomberg markets “ most influential ” summit, available at https : / / www. bankofengland. co. uk / - / media / boe / files / speech / 2016 / small - is - beautiful - but - big - is - necessary. pdf. all speeches are available online at www. bankofengland. co. uk / speeches one of the lessons of the crisis and the ensuing ten years was that we need to continuously challenge ourselves to ensure that we are prepared for the future. the bank has taken that to heart. today i want to highlight two innovations. first, the bank has recently supplemented the ability to provide liquidity to our expanded set of members by ensuring that we are operationally capable of accepting equity collateral, should the need ever arise. and, second, in pursuit of a more diverse and resilient financial landscape in the uk, we have been progressing work to enable islamic banks to hold bank of england reserves to meet their regulatory requirements for holdings of high quality liquid assets in a way consistent with islamic commercial jurisprudence. and as a result, today i can announce that we will shortly be establishing a new subsidiary of the bank, to house the shari ’ ah compliant facility ; this will be a special purpose vehicle, called the bank of england alternative liquidity facility ( bealf ). this will also be the first non - interest based liquidity facility to be offered by a major western central bank, providing important structural support to the uk ’ s islamic finance sector, and further strengthening the uk ’ s position as an international financial centre. enhancing our policy readiness with all of this capability comes the need for accountability. we are running a much larger balance sheet than ever before. but holding billions of pounds worth of collateral over a variety of asset classes, and big exposures to smf members, means that we are exposed to risk. and as responsible public servants, we must manage that risk carefully. we have developed the sophistication of our own risk management alongside the growth in our balance sheet. in 2015 we established for the first time a rigorous second line financial risk division, organisationally distinct from our well - established and highly

’ s response to the winters review can be found at https : / / www. bankofengland. co. uk / / media / boe / files / news / 2013 / march / response - of - the - boe - to - the - three - cort - commissioned - reviews. the quote from the governor is taken from carney, m. ( 2013 ), “ the uk at the heart of a renewed globalisation ”, speech at an event to celebrate the 125 th anniversary of the financial times, available at https : / / www. bankofengland. co. uk / - / media / boe / files / speech / 2013 / the - uk - at - the - heart - of - a - renewedglobalisation. pdf. the three liquidity insurance facilities are : ( i ) indexed long term repo – for predictable / regular need for term collateral transformation ; ( ii ) discount window facility – for firm - specific liquidity shock requiring liquidity in bespoke size and timing, with lagged disclosure ; and ( iii ) contingent term repo facility – for actual or prospective market - wide stress meaning smf participants need cheap, plentiful cash at term. more information on the bank ’ s facilities can be found in the ‘ red book ’ https : / / www. bankofengland. co. uk / / media / boe / files / markets / sterling - monetary - framework / red - book. all speeches are available online at www. bankofengland. co. uk / speeches prior to 2006, the bank had just 17 members of its sterling monetary framework. but liquidity needs are not just for the biggest banks & building societies. in recognition of this, we had already increased the number of members to 106 by 2012 ; today it stands at 207. the crisis also revealed that liquidity shortages can materialise far beyond the banking system ; and the financial system has continued to evolve since then. and so in 2014 we widened access to our facilities to include central counterparties and broker - dealers as well as banks and building societies. in today ’ s global banking system uk liquidity shortages can also arise in other currencies than just sterling : to that end we maintain and regularly test a network of swap lines with other central banks, enabling us to provide liquidity in a wide range of currencies : us and canadian dollars, euros, swiss francs and renminbi as well as