rates. i ’ m going to leave funding operations such as the tfsme and also lending programmes mostly to one side in my remarks today. that ’ s not to downplay their importance – they ’ ve played a key role in aiding the effectiveness of monetary policy and supporting the flow of credit to the private sector. unconventional tools are not perfect substitutes for policy rates. the effects of many of them were, and indeed remain, uncertain compared to the relatively well - understood effects of rate cuts. and at least as much if not more so than with policy rates, their effects were and are state contingent, with the transmission through to the real economy determined both by the characteristics of the financial system in which they operate and by the economic situation in which they are applied. nevertheless, from a starting point of a single tool approaching the limits of its usefulness, central banks came out of the great recession and the years which followed with new, much fuller sets of tools, as well as a much better understanding of how to apply them. this expanded toolkit was put to effective use in the mpc ’ s response to the 2016 referendum result on membership of the eu. 2 2. responding to the unprecedented shock of covid it has become almost a cliche to describe covid as an unprecedented shock. but with no comparable global events since the 1919 spanish flu outbreak, this really is a one - in - a - hundred year event. the necessary restrictions on activity that were put in place to contain the pandemic have had no counterpart in living memory. and the economic effects were similarly unprecedented – uk gdp fell 22 % in the first half of this year, the largest fall in nearly 400 years ( figure 3 ), with similar, near - simultaneous falls seen across the world. the fiscal and monetary policy response, in the uk and elsewhere, has been similarly unprecedented. the uk government launched a substantial, innovative and necessary programme of fiscal measures, with a particular and understandable focus on the labour market, as well as schemes to support the flow of finance the bis committee on the global financial system ( cgfs ) report on unconventional monetary policy tools, available at https : / / www. bis. org / publ / cgfs63. htm, provides an informative overview of the range of unconventional policy tools used in the aftermath of the crisis, along with an assessment of their benefits and side - effects. all speeches are available online at www. bankofengland.

, in formulating and implementing their reform programme, iran has maintained a constructive engagement with the ifis. i am particularly pleased that the bank of england will be involved with an imf - world bank led technical assistance team on financial sector restructuring and supervisory and regulatory frameworks for banks in iran during the coming year. another key element of efforts to strengthen the international financial architecture has been the development and implementation of a range of international standards or codes of good practice. these codes are not meant to lay down strict or inflexible rules. they are designed, however, to promote best practices, while recognising that financial systems are likely to differ across countries and across time. the imf and the world bank, working together with the relevant standard - setting bodies, have been helping economies undertake assessments of their observance of some of these standards. iran is currently working towards the adoption of internationally accepted best practice standards in a number of areas. the central bank is developing a new bank accounting framework, which represents a move towards international accounting standards, while taking account of the special features of islamic finance. the authorities are also developing an action plan for implementing supervision reforms. these developments ought to be good news for prospective investors in iran. they also help illustrate that international best practice standards can be flexible enough to accommodate individual country circumstances. the move to a more market - oriented environment brings with it new challenges. for example, liberalising exchange controls and freeing the exchange rate to market forces brings risks as well as opportunities. a sequenced approach to capital account liberalisation helps mitigate these risks and that is the route iran has pursued. but that is not to say reform has stalled. since mid - 1999, the central bank has taken important steps to improve and simplify the foreign exchange market, including allowing the exchange rate to depreciate to market clearing levels. in march 2000, requirements to surrender non - oil export receipts to the central bank were abolished. the intention now is to introduce a direct, interbank foreign exchange market, and to eliminate an advance import deposit requirement by march 2001. these will be important further steps in increasing iran ’ s exposure to international competition which in turn can contribute to its productive efficiency. exchange rate unification and the partial liberalisation of trade and exchange controls will make greater demands on the effectiveness of monetary policy. for example, monetary expansion may arise from the phased reduction in banks ’ reserve requirements. it will be important for the central bank to develop effective monetary instruments to