the focus of depositors, regulators and authorities concerned with systemic stability, on the other hand, is likely to be on whether bank liabilities will be repaid on demand or when due. two specific examples may help to illustrate these different perspectives : the treatment of “ own - credit risk ” and the valuation of sight deposits. “ own - credit risk ” arises from the “ fair value option ” in ias 39, which allows an entity to fair value not only its assets but also its liabilities. on that basis, the value of liabilities, including deposits, should fall as an entity ’ s creditworthiness deteriorates. here we find a difference of perspective between shareholders on the one hand and debt holders, including depositors ( and by extension regulators and central banks ), on the other. in an economic sense, given that the equity interest in a company cannot fall below zero, as net worth diminishes debt holders bear a growing proportion of reductions in asset values. but this approach is in tension with the understandable concern of bank depositors and regulators about the capacity of banks to repay liabilities at par when due, and who therefore want measures of net worth constructed on that basis. a separate issue arises in arriving at a fair valuation of sight deposits. for such deposits, there is typically a difference between the contractual maturity ( zero ) and the behavioural maturity ( the time over which sight deposits are held in practice ). since the interest paid on such deposits is almost always less than the market discount rate, once any maturity greater than zero is admitted the fair valuation of the deposit will be less than par. but once again, depositors are likely to be more interested in the financial strength of a bank assessed on the basis that deposits are ascribed their full nominal value. moreover, any suggestion in public accounts that deposits are worth less than par could undermine the confidence on which the whole construct of banking is based. these illustrations suggest that different users of accounts may, at least to an extent, want information produced on different bases. and the simple fact is that we will not be able to make progress if different users all assert that their way of calculating or presenting the numbers is uniquely correct. i suggest, therefore, that the users of accounts should recognise that they may in reality need to adjust them to suit their particular purposes - something ratings agencies and other analysts have done for many years. it is encouraging that the basel committee on banking supervision has adopted precisely that approach in promul

on average the total time taken to reach a decision now standing at seven months. there are also some specific barriers to entry for small start - up insurers in particular. there is potentially more we can do to provide a mobilisation framework to allow these new entrants to build their businesses under a more proportionate set of regulatory requirements, and this is something we are considering as part for further information on pra expectations in this area, please see ‘ supervisory statement 2 / 18 : international insurers : the prudential regulation authority ’ s approach to branch authorisation and supervision ’ all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice of the review of solvency ii – allowing greater space for small scale start - up insurers to innovate and bring new products to the market whilst ensuring that policyholders remain properly protected. barriers to entry are not limited to authorisation of new insurers. for the london market in particular, there is a need to react quickly to changes in rates to function effectively as a dynamic market. we should continue to consider measures that could maintain and further enhance the london market ’ s pre - eminent position, including our approach to both traditional capital investment and insurance linked securities ( ils ). the ability to access capital and obtain regulatory permissions can be particularly critical during market turning events : to recover capital positions, to stabilise the market, and to respond to new opportunities. both the regulator and industry play a role in ensuring quick delivery in these circumstances – industry through the prompt and accurate provision of information to enable us to assess applications, and ideally through the development of contingency plans ahead of time ; and the regulator by ensuring that our process to consider applications is proportionate and efficient. that said, it ’ s only right that we continue to apply appropriate scrutiny to mitigate wider risks that the individual parties to transactions do not have the incentive to address. but we are no more interested in process for the sake of process than you are, and have already shown this through our past engagement with you and some recent authorisation decisions. more efficient processes that still deliver on our prudential objectives should be a positive for all sides. we intend to hold a round table discussion to explore this further with the industry. this will allow us to identify, in a collaborative spirit, regulatory and non - regulatory barriers to new capital and opportunities. the round