). firms in asia and elsewhere, such as alipay and tencent, unencumbered by legacy systems, have perhaps moved furthest and fastest in that direction. - and, fourth, public authorities are putting more weight on competition, reflecting a frustration in some quarters with the pace of consumer - benefiting change, and a recognition that innovation and competition may actually boost, rather than harm, prudential stability, where it helps reduce single points of failure and replace operationally vulnerable legacy systems. in the uk, the bank of england has a new bank start - up unit and has recently broadened access to its real - time gross settlement service ; the government created a new payments systems regulator, focused on competition, and is implementing open banking, itself the result of recommendations from the cma ; and the fca has pioneered the use of a so - called ‘ regulatory sandbox ’ as part of its project innovate. these are strong and persistent forces. the resulting technological change and innovation, though uncertain in timing, will have profound implications for the nature and range of financial services available to households and firms. traditional distinctions between regulated and unregulated activities, retail and wholesale, on - shore and off - shore, will blur as conventional models of intermediation are progressively ‘ unbundled ’. and new networks will emerge to change the way economic agents interact. some of these developments will be positive. some may not be. either way, central banks cannot afford to stand on the sidelines if they are to continue to deliver their mission of monetary and financial stability. see http : / / www. bankofengland. co. uk / pra / nbsu / pages / default. aspx and http : / / www. bankofengland. co. uk / publications / pages / news / 2017 / 048. aspx respectively. all speeches are available online at www. bankofengland. co. uk / speeches many of the most profound policy questions central banks will have to answer relate to financial stability. would a financial system based around narrower, more specialist payments, lending or asset management entities be more or less safe than one based around universal banks? if banks themselves increasingly morph into utility providers, acting as platforms for others to sell their wares, what does that mean for the distribution of risks in the system? how does one judge the appropriate positioning of the regulatory perimeter to ensure that risks are appropriately overseen whilst

the rt hon sir edward george gbe : recent uk economic developments against the background of world economic activity speech by the rt hon sir edward george gbe, governor of the bank of england, at the chartered institute of bankers in scotland biennial dinner at the exchange, held on 15 january 2001. * * * mr president, lord provost, my lords, ladies and gentlemen, this is the fourth occasion on which i have been honoured to be invited to speak at this great biennial dinner of the oldest institute of bankers in the world ; and it gives me particular pleasure this evening to join you in celebrating your 125th anniversary. on the three previous occasions i have been able to report to you steady progress of the overall uk economy, but then, as a central banker brought up to look for the dark side of the moon, i ’ ve gone on to discuss the prevailing risks and uncertainties and to pose the question : can that steady progress be maintained? i will adopt the same format this evening. since your last dinner in 1999, we have in fact, come through the short, sharp, shock to the world economy, associated with the emerging markets financial crisis, relatively unscathed. our own economy has now grown continuously quarter by quarter for over 8½ years at an average annual rate of 3 %, which is well above most estimates – at least until recently – of a longer term trend rate of 2¼2½ %. retail price inflation ( on the government ’ s target measure ) has averaged 2. 7 % over this period, and has in fact been marginally below the 2½ % target for much of the past two years. short - - term interest rates – which went up to 12 % ( and tentatively even to 15 % ) before we left the erm in 1992 have been stable at 6 % for the best part of a year. helped by a decline in inflationary expectations, uk 10 year government bond yields have fallen, to around 4¾ % which, apart from a brief period at the beginning of 1999, is the lowest they ’ ve been for nearly 40 years. they are now just about as low as in any major industrial country with the exception of japan. and the number of people in work has recently been at an all - time high in the uk as a whole - and close to its high point in scotland ; while the rate of unemployment, on a claimant count basis, is at a 25 - year low, both in the uk as a whole and in