in methods to lay off risk when a problem occurs – through, for example, credit derivatives and collateralisation – be as ready to contribute to solutions predicated on the give and take of long - term relationships? and will the increasing complexity and size of large complex financial institutions deter previously willing possible participants? since the fsf ’ s creation, there has been further consolidation of international banking groups and globalisation of markets. our vulnerabilities are more concentrated : although the firms and capital markets in which they are concentrated are probably more resilient, we have bigger and potentially more complex points of failure. this concentration has brought efficiencies, and has been supported george, e ( 1994 ) “ the pursuit of financial stability ”, bank of england quarterly bulletin, february. by enhanced oversight of global firms and the capital markets they operate in. but the price we pay is more complicated ( and therefore potentially more costly ) crisis resolution. a practical way forward so how can we make more progress? i have spoken about drawing up a shared framework or set of principles but i am only too aware how easily that could become a drafting exercise in which difficult issues are evaded rather than dealt with. clearly initiatives such as this workshop are a useful way to bring relevant policymakers together – and i am encouraged by the shared commitment to make progress that you have shown by being here today. my suggestion is that probably the best way of making further progress on a genuine and useful common approach is to work together on practical examples ; to consider some of the operational problems that we would face if particular sorts of crises arose. and thus establish a shared fact base and understanding of what we might expect from each other in a crisis, and how we should go about handling it. this idea of informal groups of relevant authorities is not new. in a sense, it is borrowed from the supervisory world, where colleges of regulators have existed for some time, with the aim of devising ways of pooling knowledge and developing common approaches – to supervise firms efficiently and to reduce the supervisory burden for them. the groups to discuss crisis management issues would need to bring together supervisors and central banks. both are likely to have day to day information which is relevant in a crisis, and both will also have control of tools which can be used to handle the problem. at the same time, the number of participants would probably need to be smaller than in a regulatory college if these group are to be effective. to remain focused, the core group might

the same time we have sought to improve the efficiency of our central services ; and this has required substantial reductions in numbers in some parts of the bank. our objective has been, as a public sector organisation, to deliver value for money, to ensure that the bank is cost effective in its operations and comparable to best practice elsewhere. finding suitable benchmarks for the bank, however, is not easy. the bank employs 2, 500 staff which compares with over 15, 000 at the banque de france and also at the bundesbank. but direct comparison with other central banks is made difficult by differences in functions. for example, the banque de france retains a network of 211 branches for distribution of banknotes whereas the bank has closed all but one of its regional cash centres, moving to a system using commercial banks for note distribution. where possible, individual functions - personnel, finance, property services - are benchmarked against equivalent functions in private sector firms. however the bank ’ s cost effectiveness in all functions, even those where benchmarks are hard to identify, is monitored closely by management and is subject also to the scrutiny of the court of the bank of england. corporate governance the role of court and changes to the bank ’ s corporate governance arrangements is the second area i would like to address. the powers of court to oversee the operations of the bank were substantially enhanced by the 1998 act. in particular the act : ( a ) requires the court of the bank to determine our objectives and strategy for the year ; and ( b ) sets up a non - executive committee to review the executive ’ s performance against the objectives. this is chaired by our senior non - executive, a position formally designated under the act. so our latest annual report for the year to february 2000 sets out the bank ’ s ten key objectives for the year, includes a long description by the executive of the bank ’ s performance against the objectives ; and finally a section, written by the non - executives, commenting on our performance. the aim of the act was quite plainly to increase the level of transparency of our operations ; and to raise the accountability of the executive to court as a whole, and in particular to the non - executive directors appointed to review our performance. risk control thirdly, i would like to comment on the enhancements we have made to our risk controls. this is an area where the private sector has made enormous advances in recent years, much of it strongly encouraged by the banking supervisors. risk management has become more