rachel lomax : why monetary stability matters to merseyside speech by ms rachel lomax, deputy governor of the bank of england, at the launch of the merseyside economic review 2005, the mersey partnership, liverpool, 24 february 2005. * * * it is a great pleasure to be back in merseyside, as the guest of the mersey partnership. it ’ s always inspiring to be in a city that has a great future as well as a glorious past – and i ’ m not referring to will alsop ’ s supercity of the north. when i was last in liverpool everyone was on tenterhooks waiting to hear the outcome of the european capital of culture. congratulations on a spectacular result. by all accounts you ’ re set to be european capital of shopping too when the new grosvenor development opens in the paradise area of the city. this is my first visit as a member of the bank of england ’ s monetary policy committee ( mpc ). of course, the bank and liverpool go back a very long way. liverpool was a village when the bank was founded. by the time we opened our first branches around the country, that village had grown into a major port, the gateway to the workshop of the world. so it was natural that the branch the bank built in castle street in around 1850 was one of its grandest, the work of charles cockerell. we still have agents in the city – neil ashbridge and john young. and only three years ago the bank ’ s court held its annual out - of - london meeting in liverpool ’ s imposing town hall. i am particularly pleased to launch this, the third edition of the merseyside economic review. the partnership had its origins in a daily post campaign over a decade ago ( ‘ who speaks for merseyside? ’ ). it broke new ground then and it has been breaking new ground ever since. the economic review was the first of its kind for any uk city region. and the partnership ’ s report on ‘ the gender agenda : women in the merseyside economy ’ is another first. the value of the partnership ’ s approach is clear. economic regeneration is a highly complex long term business which has to bring together many different bodies and initiatives – at local, regional, national, european and even international levels. it ’ s only too easy to lose sight of the big picture. but successful partnership rests on shared goals and clear expectations. this review charts the way

that the firm is taking the matter seriously ; proportionate consequences for the individual, including some form of disciplinary warning and possibly some impact on remuneration ; and a wider review of lessons learned if there was any evidence that there was a systemic problem. see page 16, financial reporting council ( frc ), “ corporate culture and the role of boards : report of observations ”, july 2016. see footnote 7 for details. with appropriate modifications to reflect the fact that it has a very different range of functions to a commercial bank and is accountable to a different range of stakeholders, including parliament. for further details see : www. bankofengland. co. uk / about / documents / smr. pdf all speeches are available online at www. bankofengland. co. uk / speeches now consider the bank ’ s response to charlotte hogg ’ s case : she was formally warned in the strongest – and most public – of terms. there were consequences for her compensation. while she couldn ’ t forfeit a bonus as bank of england governors cannot receive one, she waived her salary increase this year. court reassigned her coo responsibilities. court reconfigured reporting lines and internal structures in order to improve governance, compliance and disciplinary processes, including reassigning the smr responsibility for implementing our code. and, on the basis of this one incident, the independent directors of court have initiated a widespread review that will draw on the expertise of the independent evaluation office, internal audit and the national audit office. its results will be made public. in other words, consistent with our higher standards, the bank planned a tougher response than we would expect in the private sector, but one that, in our judgement, was still proportionate to an honest mistake that was freely and transparently admitted. the treasury select committee ( tsc ) reached its own judgement, which in turn triggered charlotte hogg ’ s decision to resign. i fully respect both the tsc ’ s judgement and her decision. i wanted to speak to this, not to continue the debate about the rights and wrongs of this case, but instead to highlight some of the lessons that the bank and industry might draw from it. in particular, i want to dispel the urban myth that has developed around these events. while the prudential regulation authority ( pra ) can impose financial penalties and suspension under the smr, we do not run for our regulated entities a disproportionate