and agencies. such a pool of crisis expertise needs to be identified beforehand and continuously developed, including through simulations, to reduce the time to action during a crisis. last, but certainly not least, is the element of trust. in the panic and chaos during crisis situations, feeble coordination and communication arrangements will falter easily. this can bis central bankers ’ speeches occur even with well - established frameworks and dynamic resource persons at hand. communication failures during robert hall ’ s expedition were not caused by the lack of infrastructure or defined channels for information dissemination. it stemmed from a more fundamental issue. those involved in the final climb were complete strangers until several weeks before. unfamiliarity among team members generated communication barriers, distrust and uncertainties. this did not engender efforts to create a robust co - dependency and coordination structure to collectively weather extremities faced on mount everest. strong policy frameworks and institutional arrangements only make interagency coordination and communication feasible. but it is entrenched mutual trust, fostered during stable times, that makes them credible in challenging times. trust ensures that collaboration arrangements, secured in good times, remain firm and functional in the face of crises. trust nurtures confidence and enables reliance on the competence of others. without trust and symbiotic crisis networks within and across agencies, a crisis framework offers little more than false comfort during crises. the bank ’ s own experience in the management of crises, as well as global reforms that are taking place in this area, continue to be useful in guiding us as we navigate this increasingly demanding policy domain. we have continued to make important progress. in the spirit of building trust and agility during normal times, we have worked hard to strengthen coordination arrangements with our regional counterparts and key domestic authorities. to name a few, this has included the development of crisis management protocols that are outlined in the strategic alliance agreement with pidm, the operational framework for financial crisis management and resolution with the securities commission, and the executives ’ meeting of asia - pacific central banks ( emeap ) crisis management and resolution framework involving 11 jurisdictions. numerous refinements have been introduced, and several crisis simulations were conducted. all in response to anticipated changes in the financial and regulatory landscape, and to continuously elevate our level of operational preparedness. we remain committed to building strong relationships based on mutual trust that will serve us well through the uncertainties that invariably accompany any crises. and we continue to work on ensuring that these arrangements are credible when disaster

between savers and borrowers across the eu as a whole. and, second, that the risks to economic and financial stability of an open capital account and cross border financial services could be managed by sound economic and financial policies to prevent destabilising volatility of capital flows and by good financial services regulation at the eu level. in the eu, the regulatory framework for openness and for managing the financial stability risk around the single market in financial services was built very clearly on the principles of common rules – with force of law – commonly applied and on mutual recognition. it is worth dwelling a little on what lies behind these principles. first is the need for the so - called ‘ level playing field ’. to have an effective single market it is necessary to align regulation to ensure that it does not act to prevent cross - border activity or to distort competition. in this respect it is worth recalling that the treaty talks of the “ approximation ” of laws and of “ harmonisation ”. without common rules, commonly applied, national regulation can be used to block entry and to protect national players. and, equally, it can be used to give domestic players an advantage in their cross border activities. this is, of course, important in other areas of the single market. but it is particularly important in the single market for financial services because the risks of regulatory arbitrage are very bis central bankers ’ speeches large and have consequences that go wider than the distortion of competition. we have seen in recent years how damaging those consequences can be in terms of financial stability. to be confident of maintaining financial stability in a single market with free movement of capital, each member state needs to be confident in the strength and in the application of prudential regulation in other member states. this is especially important for the uk, which has the largest most internationally active and most complex financial sector in the eu. we are host to more foreign institutions than any other member state. as the bank of england deputy governor with specific responsibility for financial stability, i can say that it is crucial that the single market for financial services is supported by a framework of common prudential rules that are fit for purpose and that are consistently applied. this is intrinsic to the ability of the bank to deliver financial stability in the uk. the importance of this has been very powerfully and painfully underscored by the experience of recent years. of course, this is true internationally, outside of the eu as well as inside. one of the clear