cut. choosing to focus this part of the tightening cycle solely on bank rate will at the margin imply a faster increase than would have been the case were we to combine it with a tightening via a reduction in the stock of qe as well. this will be more likely to give us the ability to respond to an adverse shock using bank rate rather than tools which are inherently less flexible and with which we are less familiar. based on past experience, the mpc currently judges that the level of bank rate which would provide room for a material reduction is around 2 %. as chart 4 shows, 67 of the 106 loosening cycles since the bank was founded in 1694 were achieved by reducing bank rate by 2 percentage points or less. you could argue that there is a case for choosing a level higher than “ around 2 % ”. to do so, however, would extend the horizon over which we would be expected to reach that level, and by implication extend the horizon over which the stock of qe would be held on behalf of the mpc. given the gradual pace at which the equilibrium rate may rise, such an extension could be very long. it has never been the intention of the mpc to retain indefinitely the stock of assets purchased as part of qe. 9 were it to do so, there is a risk that maintaining such a large stock of government debt as a monetary policy tool might blur some external perceptions of the distinction between monetary and fiscal policy. that could lead to doubts over the independence with which we were pursuing our objective of price stability, which would represent a significant step backward. decisions on the stock of gilts held in the apf have always been made solely by the mpc in the sole pursuit of its monetary policy objectives mandated by parliament and that should always remain the case. central bank independence has been shown to bring great economic benefit in the form of lower and more stable inflation – a result that has stood the test of the financial crisis and is something we should treasure. 10 joyce, m, tong, m and woods, r ( 2011 ), “ the united kingdom ’ s quantitative easing policy : design, operation and impact ”, bank of england quarterly bulletin, vol. 51, no. 3, pages 200 – 12. for example, in his 2009 letter to the chancellor requesting the mpc be able to use the asset purchase facility for monetary policy purposes, the then governor, mervyn king said “ at some future date, i would expect that the mpc

ask not what the economy can do for insurers – ask what insurers can do for the economy speech given by anna sweeney, executive director, insurance supervision division delivered at the bank of america 25th european financials ceo conference 22 september 2020 i am grateful to alan sheppard, megan bell and zachary morris - dyer for their assistance preparing this speech. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice good morning and thank you to bank of america for inviting me to speak here today. in a normal year, i would use these remarks to run through our regulatory agenda. but this year it is inevitable that my remarks will focus on the effects of covid - 19 : a human tragedy for millions, the worst economic crisis in the uk for several centuries and an unparalleled global challenge. our economy and the actors within it are continuing to face numerous challenges and a great deal of uncertainty. the aim of the bank of england – along with colleagues from other public sector institutions – has been to build a bridge across the economic disruption caused by the pandemic. and insurers – as providers of protection, as guarantors of retirement income and as institutional investors - have an important role to play in the recovery from that crisis. with that in mind i ’ d like to take the opportunity today to look ahead, at the challenges and opportunities of what is waiting for us on the other side of the bridge – different, perhaps very different from the world we used to live in. because we face a lot of uncertainty. not only about the speed of recovery from recession. but about the extent and depth of permanent structural changes to the functioning of our economy brought about by adaptation to covid - 19 – and as i say, with a crucial role for the insurance industry to play in our economic recovery. i want to focus today not on the specific risks that this brings to the insurance sector – though those are real and large – but on the role of the insurance sector and its regulatory framework in supporting broader economic rebuilding in a changed landscape. not on what the economy might do to insurers, but on what insurers can do for the economy. of course managing your own risks and supporting the wider economy is not an either / or choice. a virtuous circle operates between the provision of financial services, and the strength of the economy, and hence the strength of the balance sheets of the