0 % 2. 0 % nov 08 may 08 nov 07 may 07 nov 06 may 06 nov 05 may 05 nov 04 may 04 nov 03 may 03 nov 02 may 02 0. 0 % sources : capital iq and bank calculations ( a ) 30 - day moving average of market capitalisation other footnotes as per chart 5 bis central bankers ’ speeches chart 7 : market capitalisation to book - value of debt 15. 0 % 12. 5 % 10. 0 % 7. 5 % 5. 0 %'no crisis'banks'crisis'banks 5 % threshold lehman failure 15 sep 08 2. 5 % nov 08 may 08 nov 07 may 07 nov 06 may 06 nov 05 nov 04 may 05 may 04 nov 03 may 03 nov 02 may 02 0. 0 % sources : capital iq and bank calculations ( a ) 30 - day moving average of market capitalisation other footnotes as per chart 5 chart 8 : market capitalisation to book - value of equity 2. 50 2. 00 1. 50 1. 00'no crisis'banks'crisis'banks 1. 20 threshold lehman failure 15 sep 08 0. 50 nov 08 may 08 nov 07 may 07 nov 06 may 06 nov 05 may 05 nov 04 may 04 nov 03 may 03 nov 02 may 02 0. 00 sources : capital iq and bank calculations ( a ) 30 - day moving average of market capitalisation other footnotes as per chart 5 bis central bankers ’ speeches chart 9 : optimal capital structure – debt and equity optimal capital structure – d + e present value of costs expected costs of financial distress expected taxes optimal leverage ratio debt / equity source : bank of england chart 10 : optimal capital structure – debt, equity and contingent capital optimal capital structure – c + d + e present value expected taxes expected bankruptcy costs taxes paid due to existing equity optimal portion of convertible debt 100 % source : bank of england bis central bankers ’ speeches chart 11 : major uk banks ’ tier 1 capital ratio % including bonuses paid as cocos including dividends paid as cocos actual tier 1 capital ratio 2000 2001 2002 2003 2004 2005 2006 2007 sources : annual accounts and bank calculations ( a ) alliance and leicester, banco santander, barclays, bradford & bingley, hbos, hsbc, lloyds tsb, nationwide, northern rock and rbs. ( b ) assumes that 50 % of bonuses are paid as cocos and retained. bonuses are assumed to equal 20 % of total staff costs. ( c ) contingent capital is assumed to be included

- 1 - 1 - 2 - 2 note : the data are monthly and extend through july 2024. the index is presented as the number of standard deviations from its average value. the outlined shaded bar indicates a period of business recession as defined by the national bureau of economic research : february 2020 - april 2020. source : federal reserve bank of new york. public figure 5 core pce prices percent change from previous month 0. 8 0. 8 0. 7 0. 7 0. 6 0. 6 0. 5 0. 5 0. 4 0. 4 0. 3 0. 3 0. 2 0. 2 0. 1 0. 1 - 0. 0 - 0. 0 - 0. 1 - 0. 1 - 0. 2 - 0. 2 - 0. 3 - 0. 3 - 0. 4 - 0. 4 note : the data are monthly and extend through december 2021. pce is personal consumption expenditures. the gray outlined shaded bar indicates a period of business recession as defined by the national bureau of economic research : february 2020april 2020. the light - green outlined shaded region highlights the period from april 2021 to september 2021. source : bureau of economic analysis, pce, via haver analytics. public figure 6 job openings to unemployment ratio 2. 5 2. 5 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 note : the data are monthly and extend through july 2024. the ratio is calculated as the jolts ( job openings and labor turnover survey ) job openings at the end of the previous month divided by current - month unemployed. the outlined shaded bar indicates a period of business recession as defined by the national bureau of economic research : february 2020 - april 2020. source : bureau of labor statistics via haver analytics. public figure 7 midpoint of the target range for the federal funds rate percent note : the data are daily and extend through august 22, 2024. the outlined shaded bar indicates a period of business recession as defined by the national bureau of economic research : february 2020 - april 2020. source : federal reserve board.