of payment arrangements to improve the speed and reliability as well as reduce financial risk, transactions costs and the risks of fraud, errors and other major types of risks inherent in the payment system. a well - developed statutory and regulatory framework for the payment system, thus, reduces uncertainty and risk, and provides the needed clarity. let us recall that payments systems are but one of the five key types of financial market infrastructures ( fmis ). the four others being the central securities depositories, securities settlement systems, central counter parties and trade repositories. fmis are key components of the financial system. they play a critical role in the smooth functioning of the financial market and can be a source of both financial stability and operational efficiency by, inter alia, establishing and ensuring secure arrangements for the timely clearing and settlement of obligations between counterparties. to manage the relationships among the various counterparties and stakeholders and also to mitigate risks, it is imperative for the national payment system ( nps ) to operate on sound legal premises. legal certainty brings confidence, and principle 1 of the cpss - iosco principles for financial markets infrastructures underscores the importance for fmis to have a well - founded, clear, transparent, and enforceable legal basis for each material aspect of their activities. the cpss - iosco principles further set out the five key considerations in order to fully comply with the first principle, which are as follows : 1. the legal basis should provide a high degree of certainty for each material aspect of an fmi ’ s activities in all relevant jurisdictions ; 2. an fmi should have rules, procedures, and contracts that are clear, understandable, and consistent with relevant laws and regulations ; 3. an fmi should be able to articulate the legal basis for its activities to relevant authorities, participants, and, where relevant, participants ’ customers, in a clear and understandable way ; 4. an fmi should have rules, procedures, and contracts that are enforceable in all relevant jurisdictions. there should be a high degree of certainty that actions taken by the fmi under such rules and procedures will not be voided, reversed, or subject to stays ; and 2 / 4 bis central bankers'speeches 5. an fmi conducting business in multiple jurisdictions should identify and mitigate the risks arising from any potential conflict of laws across jurisdictions. a proper understanding of these key considerations is, thus, mandatory for central bankers. i need not dwell further on these as they

be argued, solves the uk ’ s productivity problem at source and at a stroke. for economic historians, this could be thought of as an act of schumpeterian creative destruction. for horror film - watchers, it could be thought of as an act of systematic zombie - slaying. i believe such an approach is probably wrong - headed. most tail companies are not zombies, overburdened by an insurmountable mountain of debt or a broken business model. rather they are companies surviving, but not yet thriving. and they account for fully 80 - 90 % of all jobs. they are not the tail ; they are the dog. if you restricted creative destruction to true zombie – those whose productivity was negative – this would make little arithmetic difference to average productivity, raising it by perhaps 1 %. a more creative solution to the long tail problem would be to build a stronger diffusion infrastructure – that is to say, creating some stronger and longer diffusion spokes to attach to the uk ’ s strong innovation hub. let schumpeter ( 1942 ). assumes workers with negative productivity flow into firms with zero productivity. all speeches are available online at www. bankofengland. co. uk / speeches me discuss three approaches for creating those institutional spokes. all three are already underway, to some extent. once in place, they could speed - up the process of technological trickle - down to the long tail. ( a ) supporting supply chains recent years have seen a lengthening and deepening of supply chains, nationally and internationally. the largest uk companies have direct supply chain links with several thousand other companies, large and small, national and international. as well as benefitting efficiency and lowering costs, these supply chains provide a natural infrastructure that could be harnessed to spread good practice across companies. some companies already actively support firms in their supply chain to help improve their productivity, the fruits of which can then be shared. a set of structured projects are underway nationally, co - ordinated by be the business, which aim to use the supply chain infrastructure to disseminate knowledge and best practice across companies in the long tail. as another example, i recently visited a company which had invested in a new technology centre. this enabled them to simulate all of the processes and products in their complex business. they had created, in effect, a “ digital twin ” of their business. this technology allowed them to evaluate the impact of potentially productivity - improving changes to their business model,