david clementi : the entrepreneurial economy - a collaborative approach speech by mr david clementi, deputy governor of the bank of england, at the icaew conference, held in london, on 9 may 2000. * * * ladies and gentlemen, i am delighted to have the opportunity to address you at the end of - what i am sure has been - a thought - provoking day. for the bank, this conference has a two - fold importance. first, it has, we hope, helped to promote discussion and, more important, action to strengthen entrepreneurial activity in the uk economy. but secondly, we are delighted to have this opportunity to work closely with the icaew, especially given the important role of your president as chairman of our non - executive directors. the bank ’ s interest a good place to start my remarks might be to ask why the bank of england, as a central bank, is interested in this subject. in fact the bank has for many years taken a broad interest in the efficient functioning of uk industry, and especially in the provision of finance to industry. this falls within the third of the bank ’ s three core purposes. the first of our core purposes is to promote monetary stability in the united kingdom. a huge number of column inches in the press and elsewhere are now devoted to watching our conduct of monetary policy, as the mpc seeks to meet the government ’ s inflation target of 2½ %. and, of course, our interest in low and stable inflation is not just to create monetary stability but more widely to create a stable macroeconomic environment in which firms of all sizes have the confidence to plan ahead with some certainty. thus there is a strong overlap between our monetary role and our second core purpose, which is to ensure that the financial system remains stable and sound. our mou with the treasury and the fsa provides us with a responsibility for the financial system as a whole, requiring us to look for possible shocks, emanating internally or from overseas, that might disrupt the stability of financial markets. the third of our core purposes is to ensure that the uk financial system works as efficiently and effectively as possible in meeting the needs of the wider economy. one dimension of this is to try to ensure that small and medium - sized businesses in the uk can obtain funding on a competitive basis. in creating an entrepreneurial economy, small companies continue to be one of the vital engines of innovation and growth. the background environment today you will have heard a great

by the covid pandemic in 2020. this statement sets out our expectations on the second and third of these pillars. supervisory cooperation to support responsible openness to international wholesale banking, be it as branches or subsidiaries, and to meet our objectives on safety and soundness and financial stability, we need confidence that : a. the home state supervisory regime delivers outcomes which are sufficiently equivalent to the uk regime ; b. there is effective supervisory cooperation ; and c. there is assurance over the home state resolution framework. https : / / www. bankofengland. co. uk / speech / 2020 / sam - woods - city - banquet https : / / www. bankofengland. co. uk / financial - stability - report / 2020 / december - 2020 all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice the first and last points concern in large part the legislative framework, rules and powers of intervention that home states and authorities have. the better the outcomes they deliver, so the more reliance we can place on risks arising from overseas operations being manageable. the second point is about how those powers are applied, the practices, and openness of overseas authorities that wield them. it is on this point that i want to focus as a supervisor. cooperation with home state supervisors for both branches and subsidiaries, the pra places reliance on cooperating closely with the home state supervisor, for branches this is particularly the case for prudential requirements, because a branch is not a separate legal entity. but for both there needs to be effective regulatory and supervisory cooperation if openness is to be ‘ responsible ’. we have a long history of working very effectively with a range of supervisory authorities, including the us, eu, switzerland, japan, and many others. the recent market stability issues resulting from the covid health crisis has provided an opportunity to ensure there is a good flow of information between authorities and coordinate our approaches where appropriate. as a recent example, in december, the pra, european central bank ( ecb ) and federal reserve board all published short statements on our respective websites5 highlighting that, recognising the global and interconnected nature of banks, we are committed to working closely to ensure that supervisory approaches on operational resilience are well coordinated. given the uk ’ s exit from the eu, i would like to specifically mention the open and supportive relationship we have with colleagues at the