for lending scheme, originally put in place for monetary policy purposes, was refocused from household to small business lending for financial stability purposes. similarly, both committees have made it clear that monetary policy is the last line of defence against financial stability risks, thereby establishing clear lines of responsibility and accountability. this coordination is particularly important if either of the “ secular stagnation ” stories is relevant. by addressing risks to financial stability, the bank ’ s fpc helps ensure that monetary policy can remain as stimulative as necessary for as long as necessary to achieve its objectives. in doing so, it reduces the risk of a deepening liquidity trap caused by compounding debt - fuelled consumption. and it helps to lay bare more clearly the underlying growth potential of the economy. bis central bankers ’ speeches the third aspect of the policy response is better financial regulation and supervision. in both the us and uk, the repair of the financial sector was a prerequisite for recovery. indeed, one of the reasons behind a persistently negative equilibrium real interest rate has been the restricted supply of credit from a damaged banking system. going forward, financial reforms will help guard against excessive pro - cyclicalities that could emerge in a “ low for long ” environment. but financial reform is about much more than fixing the failings in advanced economies ; it is one of the keys to rebalancing the global economy. the global savings glut will not disappear in the absence of further financial liberalisation in china. that will only proceed if there is a transparent, resilient global financial system worth joining, and will only be completed by further internationalisation of the renminbi. those realities are key reasons why the bank of england is so engaged in the work of the financial stability board and has moved to support london as a hub for renminbi clearing. conclusion for the first time in a long time it seems reasonable to expect the hopes and dreams of the holiday season to be fulfilled. the ghost of christmas present is a cheerful spirit. as uncertainty diminishes, credit conditions improve and balance sheet repair progresses, monetary policy is gaining traction. the strength of the uk recovery and the fall in its unemployment rate suggest that the equilibrium real interest rate is now rising gradually back towards zero. the ghost of christmas past should not be forgotten. a recovery may be gaining pace but our economies are a long way from normal. leverage is still high and weak demand for advanced economy exports could persist for some time

a payments strategy for the 21st century remarks made by andrew hauser, executive director, banking, payments and financial resilience payment strategy forum “ launch of the final strategy ”, london 29 november 2016 all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx thank you very much for the opportunity to speak to you today at the launch of the psf ’ s payments strategy st for the 21 century. i want to start by emphasising that this is not the bank of england ’ s strategy – or the uk authorities ’ as a whole. and that in fact is its great merit : because it has been drawn up by a genuine partnership of those who actually provide and use retail payments services, with the interests of those users uppermost in their minds. but that doesn ’ t mean the bank has been ‘ hands off ’, or lukewarm over the direction of travel. quite the reverse. we have a deep interest in, and responsibility for, maintaining the stability of sterling payments. first, through our statutory responsibility for the supervision of the major payments schemes. second, by ensuring that all material payments either settle in, or are backed by, central bank money – the safest form of settlement asset. and, third, through our role as member of some schemes as a bank in our own right. it is sometimes said that a focus on stability impedes innovation. but there is no reason why that has to be true. well - crafted innovation can reduce market concentration, yield new risk - mitigating technologies, and increase the scope for electronic settlement in central bank money : all of which enhances, not reduces, financial stability. so we are open, not closed, to such advances. at the same time, we make no apologies for having a relentless focus on stability and resilience, and have previously set out the criteria against which we assess change in the payments landscape. indeed, households and companies expect nothing less. surveys regularly show safety to be at the very top of people ’ s expectations from payments. no amount of real - time, api - enabled, mobile front ends can make up for the prospect – however remote – that one ’ s money might be lost or mislaid ; or that a failure in one part of the payments network might bring down other parts of the banking system. judged against those yardsticks, the uk ’ s payment systems have actually performed very well in recent years