, cpi inflation is as low as it ’ s been for four years. in terms of growth, the obvious question this raises is, why now? why, after throwing everything bar the kitchen sink at the economy over the past few years, has the economy started to grow only now? even more importantly, will the recovery last? having seen a few false dawns over recent years, has the recovery really taken hold this time? and what does all this mean for monetary policy. in particular, what does the mpc ’ s so - called forward guidance, which we announced in the summer, mean for you – the businessmen and women driving this recovery? and that ’ s the plan for today : to consider three key questions about the economic recovery that we ’ re now finally enjoying – why now, will it last, and what next for policy? securities and investment review, september 1993. bis central bankers ’ speeches why now? first, why now? why after several years of frustration and disappointment has the economy begun to grow? it ’ s hard to be certain : this time last year we were not predicting such a sharp turnaround in growth and there ’ s a danger of appearing to be wise after the event. but, at least with the benefit of hindsight, two developments in particular seem important in driving the turnaround : an easing in credit conditions ; and a reduction in economic uncertainty. let me say a few words about each, starting with credit conditions. improved credit availability although it ’ s still patchy and there ’ s further to go, we ’ ve observed a marked improvement in the ability of many companies and households to access credit over the past 18 months or so. some of that stems from a lessening of tensions within the euro area, which has helped to ease pressures on banks both sides of the channel. it ’ s also been aided by domestic polices, including the funding for lending scheme, a series of regulatory actions to improve the strength and resilience of our banking system and, more recently, the government ’ s help - to - buy policies. i fully recognise that the ability of many smes – perhaps many of you here today – to access credit at reasonable rates still remains impaired. but even here my sense is that some progress has been made. that ’ s the message from surveys of small businesses, from reports by the bank ’ s agents, and indeed that i get from my own conversations with many businesses around the country. we ’ re not there

a trade - by - trade basis, on the type of contract, notional value, currency, maturity, counterparties of derivative transactions. this needs somehow to extend to valuation ( s ) and collateral terms. my appeal to the us, eu and asian authorities is twofold. first, should we not have a trade repository covering securities lending – a cash market – including the way collateral is employed? we surely need to do something to lift the veil on this vital financing market and, probably, on the collateral swap market more generally. second, we need to think carefully about the purposes for which the information in trs is collected, and thus how it is stored. as well as helping to identify market abuse, which of course is a core mission of securities regulators, we need to use the information to track more generally what is going on in markets to help us spot incipient, often slow - moving threats to stability. and even though individual trade repositories are being set up to handle specific markets ( credit - default swaps, interest - rate swaps etc ), it needs to be possible to see the pattern of risk and flows across markets and products. recognising that, paris in 1974, kuala lumpur in 1983 and, most dramatically, the hong kong futures clearing house in 1987. paragraph 3. 21, report of the hong kong securities review committee, 1988. i should disclose that i was an advisor to the src and drafted much of the text submitted to the committee. bis central bankers ’ speeches the fsb has called for the relevant authorities, liaising with the bis committee of the global financial system, to set requirements for reporting of transactions to trade repositories that meet the needs of financial stability analysis. 18 this work needs a higher profile. firms markets are places where end - users and intermediaries meet. securities regulation affects financial firms – traders and asset managers – as both intermediaries and as users. it is important this gives proper weight to financial stability. three broad thoughts on that. regulated banks : provisions and disclosure everybody in this room and outside knows, or should know, that for much of the past quarter of a century there was a stand off between bank supervisors and securities regulators over provisioning policy. on the one hand, until they gave up in exhaustion, many bank supervisors wanted banks to set aside ( general ) provisions against losses that were implicit in portfolios but not yet manifest in arrears or other concrete measures of