lower bound in a monetary union like the euro area. at this point, is moving from interest rates to asset purchases as the main instrument of monetary policy simply a linear progression? or does the specific institutional makeup of the euro area mean that there are non - linearities when the lower bound is reached, which in turn make large scale asset purchases of private and sovereign paper an exceptional tool? my own view is that when the central bank is in danger of missing its mandate, and it has a tool at its disposal that is both legal and effective, it has to use it. indeed, the governing council is unanimous that the asset purchase programme is a monetary policy tool in a legal sense. yet at the same time, it is clear that the design of an asset purchase programme including sovereign bonds has to reflect the specificities of the euro area institutional framework with a single monetary policy and many fiscal authorities. and the governing council decision reflects these considerations. we have taken a significant monetary policy step, showing that we have the capacity and determination to deliver our price stability mandate, and that we act in full independence. but we have also acknowledged, through the loss sharing arrangement, the reality that the euro area is not a fiscal union and it is for politicians, not central bankers, to decide if and when it will become one. importantly, the expanded asset purchase programme was also in line with the communication on our reaction function that we introduced last year to help observers understand our strategy in an environment of heightened uncertainty. in a speech in april 2014 president draghi laid out three contingencies that would warrant further policy action by the ecb. and as each of those contingencies materialised, we responded as we indicated we would. in particular, we communicated explicitly that should we enter our “ third contingency ” – a worsening of the medium - term outlook for inflation and / or a loosening in the anchoring of inflation expectations – we would deploy a broad - based asset purchase programme. it is bis central bankers ’ speeches therefore no surprise that market participants, seeing much the same economic and financial data as we do, have largely anticipated this move. it is important to keep this in mind as it helps clarify some misconceptions about what drives the governing council ’ s decisions. long - term nominal interest rates have declined by around 100 bps since the middle of last year precisely because we specified our reaction function and markets understood it. therefore, the argument that asset purchases are unnecessary because market interest

, her majesty ’ s government is extending the senior managers regime to all firms in ficc markets and putting them on a common basis with banks and insurers. being a senior manager in finance now brings the responsibility and accountability that befits what the best in the industry have long recognised : finance is a true profession. the bank of england ’ s role in markets has been comprehensively overhauled. we ’ re replacing constructive ambiguity with open for business when we provide liquidity to markets. we ’ re working with others as one bank to develop markets that support financial stability and the real economy. we ’ ve revamped our governance and we ’ re holding ourselves to the highest standards of accountability, including the senior managers regime on top of parliamentary and public scrutiny. so a huge amount has already been completed to make markets fairer, more resilient, accountable and effective. these reforms are essential for the uk to remain the leading international financial centre. bis central bankers ’ speeches they are essential not least because the size of the uk - based market - based financial system could increase from six to nearly 15 times uk gdp by 2050. but the journey isn ’ t finished. today is a chance to take stock and reflect : not just on our achievements but on what we might have missed, overdone, or simply got wrong. given the complexity and scale of financial reform, it would be remarkable if every measure were perfectly constructed. or if they all fit seamlessly into a totally coherent, self - reinforcing whole. authorities must have the courage to listen, the honesty to admit our mistakes and the confidence to set them right. because we ’ re determined not to repeat the cycles of the past when bursts of post - crisis reforms would eventually drift into complacency and cohabitation. when the caravan moved on, markets were left unattended to slip slowly into excess and ethical drift. today we want not only to profile progress made, but also to spur a continual process of review and reform. this isn ’ t just about fixing the fault lines that caused the last crisis, but also about seizing new opportunities from fintech and market - based finance. it's about building truly global markets, in the uk and elsewhere, and the cross - border governance and cooperation they need to function well. it is precisely because we don ’ t know all the answers that we ’ re setting questions before us today : - what more needs to be done? are there gaps that