practice, doing so has meant using tools to keep financial conditions sufficiently accommodative to offset as best we can such a large shock. this has been essential to support the flow of credit to businesses, which has been very substantial, and has called on both the monetary policy and financial stability tools of the bank of england. this has also helped to lessen any longer term economic damage from the pandemic, resulting from longer term unemployment and business failures. fiscal policy, too, has played a very big part, helping to spread the cost of this large shock over time, because otherwise the cost to the public and the country would be unbearable. when i step back from all of this, i think the strong logic is that we are using the tools of counter - cyclical policy, consistent with the remit in the bank ’ s case, to support the economy as best as possible through this unprecedented shock. but i sometimes hear that the bank has flouted the rules and thereby damaged its independence, by purchasing government debt and lowering the government ’ s cost of borrowing. in many ways, i am glad that central bank independence is being vigilantly scrutinised. this is an important aspect of the bank ’ s public accountability. but i ’ m sorry to have to be blunt, i ’ m afraid these arguments are entirely without merit. in a world where the government has to manage the task of spreading the cost of the pandemic which would otherwise fall on individuals at great cost to them, and the central bank is acting counter - cyclically to support demand in the economy consistent with its inflation target, it is hardly surprising, and indeed consistent, that the government should be able to benefit from those financing conditions. if the situation was otherwise, and the central bank acted to prevent counter - cyclical policy taking effect, we would be abandoning the remit on which our operational independence is based. put another way, to be independent does not mean to be disorganised. independent pursuit of an inflation target does not mean that monetary policy is uncorrelated with other macro policies, including fiscal policy. indeed in the current circumstances there are mutually reinforcing effects from monetary and fiscal expansions. the consistency of the response of monetary and fiscal policy is something that the imf has emphasised and recognised in its assessment of uk policy. but that does not mean independence has been abandoned. the interventions we have made are effective because the bank is independent, and because

enormous strides in the last decade – for bis central bankers ’ speeches instance, the extent to which they have digitized their operations is extremely praiseworthy – but because competition in the banking sector is likely to increase in the next few years, they cannot rest on their laurels. in the coming months, we will discuss with stakeholders in public sector banks about what needs to be done to further improve their stability, efficiency and productivity. third, we need to enlist markets in the aid of financial institutions. liquid markets will help banks offload risks they should not bear, such as interest rate or exchange risk. they will also allow banks to sell assets that they have no comparative advantage in holding, such as long term loans to completed infrastructure projects, which are better held by infrastructure funds, pension funds, and insurance companies. liquid markets will help promoters raise equity, which is sorely needed in the indian economy to absorb the risks that banks otherwise end up absorbing. rather than seeing markets as being inimical to the development of the banking sector, we have to see them as complimentary. in the coming weeks, we will roll out more measures to improve the liquidity and depth of the g - sec market. we will then turn to money markets and corporate debt markets. we have introduced new variants of interest rate futures and products like inflation indexed certificates, and we will continue to work to improve liquidity in derivative markets. as the exchange markets became unstable, we imposed restrictions on participation in these markets. we will remove these restrictions in a calibrated fashion. fourth, we have to reach everyone, however remote or small, with financial services. financial inclusion does not just mean credit for productive purposes, it means credit for paying a doctor to heal your child or to pay lumpy school or college fees. it means a safe mode of remunerated savings, and an easy way to make payments and remittances. it means insurance and pensions. it also means financial literacy and consumer protection. we have made great strides in inclusion, but we are still some distance from our goal. we have adopted a branch based strategy for inclusion, but it is not enough. too many poor people in so - called “ over - branched ” urban areas still do not have access to banking services. we have many experiments under way to use technology, mobile phones, new products such as mobile wallets, and new entities as business correspondents to link people up to the formal financial system. much as with cell phones