bank of england a journey of 1000 miles begins with a single step : filling gaps in the central bank liquidity toolkit given at a market news international connect event, chartered 28 september 2023 bank of england speech introduction in recent decades, households and businesses seeking to save, borrow or access other financial services have increasingly turned away from traditional banks and towards so - called non - bank financial institutions ( nbfis ) a wide range of firms including broker - dealers, non - bank lenders, pension funds, insurance companies and other investment vehicles. that shift reflects changes in preferences and technology, reduced bank intermediation capacity and the period of low interest rates. and it brings many positives : increasing competition and innovation, driving cheaper, faster and more diverse financial services. greater diversity may also help enhance the stability of the financial system as a whole, by increasing the range of intermediation channels, reducing concentration and improving risk sharing. 1 - way : as their scale and range has grown, it become increasingly clear that nbfis have the capacity to pose new forms of liquidity risks to financial stability, either directly or through their influence on core financial markets. 2 well before the recent conflagrations, discussion had already begun about what might be termed in which nbfis build stronger resilience against idiosyncratic liquidity shocks, while central banks develop new tools to protect system - wide stability against the most posed by these new activities. 3 some progress was made towards this goal but a comprehensive solution has proved elusive. 4 on the central bank tools side, that reflected three main things : 1 see for instance : speech by jon cunliffe at the fia sifma amg asset management derivatives forum, california 2 see for instance securitized banking and the run on repo | nber 3 see for instance : the central bank as the market maker of last resort : from lender of last resort to market maker of last resort | cepr, maverecon - willem buiter's blog : central banks in a time of crisis : a preliminary scorecard, central bank emergency support to securities markets ( imf. org ), the - review by bill winters, the repertoire of official sector interventions in the financial system : last resort lending marketmaking, and capital | bank of england and re - thinking the lender of last resort. 4 on the resilience side, the financial stability board published recommendations in 2017 to address structural vulnerabilities from liquid

the 1. 8 % enjoyed by the countries that would go on to form the euro area. however, between 1986 and 1998, before the euro was introduced, spain ’ s per capita income grew at an extraordinary annual rate of 2. 7 %, above the average for future euro area countries of 2. 1 %. the arrival of the euro also had a positive effect on growth, in spite of the serious difficulties during the crisis. since 1999, gdp per capita has been growing at 1. 2 %, which is 0. 1 % higher than in the other euro area countries and much higher than during the early years of our democracy. recently, some people have tried to blame the euro for the length of the financial crisis in spain and have advocated control over monetary policy interest rates and exchange rates. what they 1 / 2 bis central bankers'speeches often forget is that being a member of the euro area enables spanish households and businesses to benefit from lower real interest rates, lower inflation rates and reduced macroeconomic volatility, all of which boost productive investments and make a vital contribution to the sustainability of public finances. furthermore, it is not true that structural currency devaluations solve economic crises. devaluations are short - term measures. in the long term, the competitive boost they provide is eroded by the higher inflation they cause. and, in a complex system of global production chains like the one we have today, devaluations can make it harder for businesses to plan. the euro is also the second - most important currency in the international monetary system3, which strengthens spain ’ s credibility in a global context. it ’ s true that the crisis revealed significant institutional shortcomings in the structure of the monetary union, but it ’ s equally true that european countries have taken this on board and carried out substantial reforms. the banking union represents one of the greatest achievements of european integration. banks are now supervised at the european level, which enables risks that transcend national borders to be identified. completing the banking union, in particular by setting up a european deposit insurance scheme, should be a priority for national governments. if we look back 40 years, it ’ s clear that spain today is a more prosperous and modern country. however, we must not forget that much remains to be done. improving the functioning of the labour market is still an outstanding issue – more than 3 million people remain unemployed, and the youth unemployment rate is still above 30 %. but there are grounds for optimism