the increase in margin is only one piece of the puzzle. what matters is that the system as a whole has the right level of liquidity to cope with volatility in derivatives markets in a stress and that liquidity is in the right place we need to understand which market participants were caught flat - footed and why. thanks to post - 2008 liquidity reforms, banks seemed able to handle the liquidity pressures they faced in march, including from margin calls. but non - banks such insurers, pension funds, hedge funds and asset managers have grown in importance over the past decade - we need to examine how well prepared they were to face the liquidity demands around margins. it ’ s too early to reach policy conclusions. but to preview the options in front of us : it ’ s possible we ’ ll want to explore solutions that could reduce the need for ccp margin to rise as much in stress by pre - positioning more liquidity at ccps during quiet periods. it ’ s possible we could accomplish this by spreading existing good practices in ccp model design. it ’ s equally possible we ’ ll want to focus on better liquidity risk management, particularly for non - banks. this could make sure market participants self - insure against margin calls on their own balance sheets – rather than pre - positioning initial margin at the ccp. improving transparency around potential margin calls could help support this. it ’ s possible that we ’ ll want to do some of both. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice the right balance of policy responses will depend on what evidence we find. to be clear, the question here is not about whether ccp margin is to “ blame ” for the dash - for - cash. the question is did the system have enough liquidity ready in the right places to respond to derivative market volatility without adverse consequences for financial stability. whatever we conclude, our policy response will need to take into account the whole story - including the essential role that margin played in preventing panic. we don ’ t want to return to the pre - lehman world of a spaghetti bowl of counterparty credit risk. 4. conclusion so going back to my original questions. first, what has the experience of march and april told us about the reforms we put in place post - 2008 to make the global financial system simpler? a : the headline answer is : it worked. when it comes

missteps which inevitably accompanied the initial design of the programme of assistance, it worked out to bis central bankers ’ speeches deliver, as i have said on a previous occasion, what it said on the tin : restoring market confidence and stabilising not only the public finances but also the economy. the rest is up to us, the irish policy makers and the irish people, to complete the recovery of the economy – which has been on a persistent growth path both in terms of output and employment for the past three years – and to rebuild the economic aspects of irish society in a way which fully resonates with our shared vision and goals. it is often observed these days that key among the characteristics needed to prosper in what seems to be a rapidly changing and increasingly unpredictable global economic environment are resilience and the adaptability to take advantage of new opportunities and trends. i believe that irish resilience has been fully demonstrated in the way in which the economy has been recovering from the disaster that struck in 2008. ireland ’ s adaptability and openness to the opportunities that emerge in the world have been well demonstrated in the rapid and firmly founded growth of the mid - to late - 1990s – the true “ celtic tiger ” period. that is why i believe there are solid reasons for optimism about the future, building on the platform of restored financial stability which the eu - imf programme helped us rebuild. bis central bankers ’ speeches