that connectedness increases most for the most central individual provisions. the full consequences of using and changing a handful of core rules are inherently broader in this new regulatory architecture. all speeches are available online at www. bankofengland. co. uk / news / speeches chart 4 : pagerank network centrality measure ( provisions for uk deposit takers, 2007 and 2017 ) note : pagerank summarises the centrality of a node within a network. in this case, it counts the number and quality of cross - references to a provision to estimate how important the provision is. more important, i. e. more central, provisions are likely to get more direct and indirect links from other provisions. to construct the decile plot, we calculate pagerank for each provision, rank the provisions ( separately for 2007 and 2017 ), and then split them into ten bins ( deciles ). we display the mean for each bin, and the 95 % confidence intervals ( vertical lines ). now, you might say : so what? different measures give us reads on different aspects of complexity – but of course they don ’ t tell us, in and of themselves, if it ’ s ‘ good ’ or ‘ bad ’. banks and we are engaged in complicated lines of business, so unsurprisingly the regulations are complicated. there is a good deal of sense in that perspective, in my view. perhaps more interesting is what these new analytical capabilities can help us do as a regulator, particularly for the effectiveness of our communications. for example, they can inform policy design by telling us ex ante how a future change in one pra rule could affect the interpretation of others. and they could identify rules where language could be tightened and which are frequently accessed by web users. and we do want to look harder at the competition aspect. small firms tell us that complexity is a real challenge and my instinct is that a simpler – simpler, not weaker – regime for small firms could benefit both our safety and soundness and competition objectives. a weaker regime for small banks would be a bad idea, particularly given the steps we have taken under our competition objective to encourage new entrants, who are by definition new and not yet tested in a downturn. but a simpler regime, perhaps borrowing from the philosophy of recent moves in switzerland and the us, could make small firms stronger and more competitive at the same time. this is an area where we may have more room to manoeuvre following

thresholds mapped against number of banks by size, up to £50b ( deposit - takers ) sources : snl capital iq, crr, bcbs, pra rulebook, eba technical standards, supervisory statements, and statements of policy. note : only includes thresholds that are either set using assets / deposits values, or can be translated into assets / deposits values. the y - axis corresponds to the proportion of thresholds / banks below the £ value for assets / deposits on the x - axis. i invite views on this picture, but offer two preliminary observations myself. first, as everyone in banking knows, by number we have a concentration of firms at relatively low asset sizes. whether this is a result of proportionality – our efforts to lower barriers to entry – or barriers to growth is a key question. second, more novel if perhaps less fundamental : there appear to be minor discontinuities around the thresholds of £5b, £10b and £25b, and a more substantial flattening and bump at £50b. these may be worth investigating further. all speeches are available online at www. bankofengland. co. uk / news / speeches complexity another thing we ’ ve been looking at afresh is the complexity of our prudential rules. the scale of the global financial crisis resulted in part from the huge complexity of the financial system, and the many gaps in the rules that sought to regulate it. fixing these gaps required more regulatory constraints and more regulatory discretion – a necessary increase in ‘ essential ’ regulatory complexity. 5 but when should we start worrying about ‘ too much ’ complexity? this is important for at least two reasons : first, excessive complexity may well be counter - productive in terms of our safety and soundness objective6 ; and second, complexity may be anti - competitive if it is harder for small firms to bear the cost of mastering it. designing a framework to trade off costs and benefits of complexity is an emerging research question. but there ’ s a complementary, empirical step : we have wanted to measure the framework ’ s complexity – to say how complex it is. legal and linguistic scholarship suggests the information burden of understanding individual rules, as well as the nature of the interactions between them, both matter here. the measurement debate tends to start with the simple metric of length : how long are our rules? our robot has run the numbers on prudential regulation for banks and tells me that there were about 700, 000 words