management, not ordinary people with deposits in banks. and finally it means making sure that if you take out an insurance contract, it will pay out if whatever you are insuring against happens. the work that the bank does in all of these areas can ultimately be summed up very simply : we maintain confidence in money. this confidence is not, though an end in itself ; it is a means to an end. confidence in money provides the foundations for prosperity. without it, companies would struggle to provide the goods and services we all use every day ; you would face difficulties in knowing how to invest for your futures, be it financing studies or buying a house. maintaining this confidence is the best contribution the bank of england can make to the good of the people of the united kingdom. all speeches are available online at www. bankofengland. co. uk / speeches building public understanding of what the bank does – by engaging with people directly – is essential to our work. that ’ s because our policies work better if our objectives are clear and the british people have confidence that we will do the right thing whatever happens. improving understanding of the bank ’ s role is also part of being accountable to the people we serve. the bank is at the heart of the uk economy. the responsibilities parliament has given us are wide - ranging and the decisions we take affect everyone in the country. people deserve the information and tools to judge how well we are doing our job and to know that we are listening to your views. today ’ s event is also part of a wider effort by the bank to move beyond traditional modes of communication to speak more directly to the people we serve. while three hundred thousand people read the financial times, there are 30 million facebook users in the uk. and while everyone knows it is good to talk, the bank is learning how it can also be good to tweet – our twitter account has 227, 000 followers, though that still leaves us a little behind wayne rooney ’ s 16. 7 million. we are revamping our publications to make them more accessible, using icons and graphics to convey our messages on webpages designed for mobiles and tablets, rather than relying only on pages of words on paper. you can take a look at our first example of this – the november inflation report – online, at www. inflationreport. co. uk. this afternoon ’ s event will showcase a selection of the materials we are planning to run alongside these changes in our communications

and we expect to have access to it, in part or whole, in line with the terms of the contract. some deposit contracts provide for more ready availability than others, and this affects the return on the deposit. of course, there is also insurance on a deposit contract up to a well publicised level. let ’ s contrast that with non - deposit debt ( bonds ) and equity contracts. if you invest in either of these, you are not promised all of your investment back, though of course you expect to make a return. a debt investor ordinarily expects the full return of their investment, but viewed from a corporate restructuring perspective this is not assured. i will come back to this. investment in debt and equity can be managed on a collective basis, as asset management. you may remember the woody allen quote that a stockbroker is someone “ who invests your money until it ’ s all gone ”. cruel i know, but it illustrates the difference between deposits, debt and equity. turning back to banks, they have deposits, debt and equity on the liabilities side of their balance sheet. the problems of the pre - crisis period in this area of bank liabilities can be summarised quite easily : they had too little equity to absorb losses, and particularly so given the major expansion of balance sheets ( more leverage of the equity ) ; they had issued forms of hybrid debt - equity that were supposed to absorb losses after equity but could only do so if the bank became formally insolvent, something that could not be allowed to happen in view of the threat to the financial system ; they had taken on a very large increase in short - term wholesale market funding which was assumed by the providers to have the characteristics of bis central bankers ’ speeches deposits. moreover, short - term wholesale funding was footloose, more so than retail deposit funding. what have we done to deal with these problems? we have increased the required equity capital held by banks – the first loss absorbing element of their liabilities. we have required that hybrid debt – equity instruments have automatic and transparent triggers which are not exercised only by an event that cannot happen. in the uk, banks have set the trigger for conversion to equity high enough at a 7 % common equity tier one capital ratio to seek to ensure that conversion happens well before the bank has run out of capital. this is the right thing to do. we have introduced liquidity regulation designed to enable banks to withstand the loss of more footloose