in water and interest on the loan would be cancelled for that year. the public authorities of 14th century barcelona hit upon a novel policy approach to the liability of bank owners – not only would bankers who failed be publicly vilified by the town crier, they would be forced to live on bread and water until they repaid their creditors. 3 how to deal with failed banks is of course only part of a much larger public policy issue – how to deal with the failure of commercial enterprises generally. arguably, the development of the limited liability corporate body – in which the owners ’ liability is limited to their see button et al ( 2015 ). there was a reluctance from banks and from depositors to limit shareholder liability. unlimited liability, it was thought, reassured depositors and noteholders that their claims were safe. so hybrid solutions were established in which shareholders ’ liability was capped at some multiple of the capital they had invested, or in which they were subject to a call for extra capital if the bank got into trouble. see usher ( 1943 ). bis central bankers ’ speeches investment – and corporate insolvency, is one of the most important foundations of modern capitalism. but banks are different for two reasons. first, their underlying business of maturity transformation means they depend on confidence. loss of confidence in one bank can quickly become a run on all banks. and given their leverage and interconnectedness, failure of one bank can lead to failures of others. and second, as banks have developed they have increasingly become the main providers of money in modern economies – 96 % of money in the uk is in the form of claims issued by banks. failure can mean that large numbers of people lose most of their access to money – if not their money itself – and to the financial system while the bank goes through insolvency. as banks developed and grew larger in the twentieth century, the question of ‘ who pays when the bank fails? ’ continued to challenge policy makers. once the liability of a bank ’ s shareholders was increasingly limited the emphasis shifted to the bank ’ s creditors, including its depositors. however the dangers of exposing short - term creditors, like ordinary depositors, to losses were demonstrated in the early twentieth century in the us. bank failures leading to depositor losses led to numerous bank runs making the whole system unstable and liable to runs at the first sign of bad news. the episode demonstrated the costs of bringing into doubt the ‘ moneyness ’ of banks ’ deposit liabilities. as

on risk management and investments in resilience. a key function of financial institutions is to help households and businesses manage the risks they face. financial institutions also have a responsibility to manage their own risks prudently so that they do not themselves become a source of uncertainty and instability. as canada's central bank, we have a role to play in mitigating and managing risks and uncertainty. our primary mandate is price stability - in other words, low, stable and predictable inflation. we also have mandates to foster a stable financial system and ensure safe and efficient payments. let me say a few words on financial stability and payments. and then i'll finish with some thoughts on monetary policy. our financial stability focus is on risks that could lead to system - wide stress. and we publish these findings in our annual financial stability report ( fsr ). 1 in our most recent fsr, published in may, we reported that canadian mortgage holders had experienced a modest increase in levels of financial stress. since then, we've observed that arrears on mortgages have continued to rise, although they remain below pre - pandemic levels. it also appears that these households have not leaned on revolving credit products such as lines of credit and credit cards to a greater degree than before the pandemic. but there is a notable increase in financial stress among borrowers without a mortgage, mainly renters. during the pandemic, for most credit products, the share of these borrowers missing payments reached historical lows. however, we're now seeing a larger share of these borrowers lagging behind on credit card and auto loan payments. over the past year the share of borrowers without a mortgage who carry a credit card balance of at least 90 % of their credit limit has continued to climb. and this share is now above typical historical levels. this is concerning. our responsibilities related to payments require us to adapt to increasing digitalization. innovation in payments continues to accelerate. in 2021, the bank assumed a new mandate for the supervision of retail payment service providers. starting november 1st of this year, more than 3, 000 service providers will need to register with the bank and follow new rules aimed at safeguarding consumers and protecting the integrity of retail payments. we are also looking at the bigger picture of payment innovation, both in canada and around the world. as part of this work, in the past few years we've built an extensive body of knowledge about the framework and technology behind