through the operation of our revised sterling monetary framework for over a decade now. [ 22 ] we want to ensure that our counterparties can access reserves through our facilities as part of routine sterling liquidity management, both in bau and in times of stress. this is vitally important as we transition to our steady state, repo - led operating framework. what i want to focus on today is the question of how we provide liquidity to the non - bank sector during stress. until now, the bank has provided liquidity to the financial system as a whole via the banking system, under the assumption that banks would onward lend and that liquidity would eventually find its way to the part of the financial system where it was most needed. but when core financial markets are severely dysfunctional, as in 2020 or as in the swes exercise, we have seen that banks are not always willing or able to pass on sufficient liquidity sufficiently quickly to nbfis to meet their demand and avoid a period of financial instability. accordingly, we have been working to develop tools to lend to nbfis directly in times of severe dysfunction in core uk financial markets when financial stability is under threat. as a first step in this work the bank announced in the summer that it is developing the contingent nbfi repo facility ( cnrf ). [ 24 ] the purpose of the cnrf is to backstop the gilt market, the most core of all uk financial markets given its size, interconnectedness and importance to the system and to financial stability. the facility will be open to eligible pension funds, insurance companies and liability - driven investment funds – these sectors are our initial [ 25 ] focus given they have both been significant sellers of gilts in past stress episodes and have higher levels of resilience relative to some other nbfis. [ 26 ] and it will be priced to be expensive when compared to market pricing in normal conditions, but attractive during times of stress. as its name indicates, the cnrf will be a contingent facility, available only when activated by the bank because we judge that gilt market dysfunction is severe enough that it threatens financial stability absent any action by the bank, and our lending facilities to banks will not, on their own, eliminate that threat. [ 28 ] i understand that there will be interest in knowing for certain when we would activate the cnrf, but it ’ s beyond our powers of prediction to provide a definitive list of which circumstances would lead to the severity of

the financing of crime and terrorism is one of the most important dimensions of the physical violent acts unleashed by terrorists in the form of suicide bomb attacks, killing of innocent civilians, etc. this realization should confirm to us that very often we may be able to, through our collaborative efforts, prevent acts of terrorism by preventing the financing of crime and terrorism. if we can do that effectively, perhaps more than three fourths of the battle may be won. without finances to equip themselves with sophisticated arms, intelligence, equipment, skills, machinery and techniques, terrorism will surely be on the wane. this then, is a fact that we must always be mindful of. 9 / 11 shocked the world. at the same time, it also united the world in its quest to defeat terrorism and eradicate financing of terrorism. post 9 / 11, the whole world has renewed its battle against, this ever growing threat of terrorism. until then, in a sad sort of a way, we in sri lanka, used to think that we were fighting this battle alone. but today, the many international conventions and the resultant resolutions that have taken place, post 9 / 11 to which we have all become signatories, consolidates our international obligations in the fight against terrorism. that indicates to us, that we are not alone in this struggle. in fact, today, we witness a closing of ranks amongst all the countries of the world to fight terrorism. while these efforts are commendable, all of us would also have to grudgingly admit that, notwithstanding the enhanced global counter - measures, terrorism worldwide is still on the increase. according to a us report released recently, an increase of 29 % has been recorded last year in worldwide terror attacks, which have become even deadlier. as a result, global terrorism deaths have recorded a 40 % increase last year. in afghanistan alone which is represented here at this forum, the number of terror attacks have almost doubled. the self destruction in the form of suicide bombers that sri lanka ’ s tamil terrorists launched in recent times, have now become commonplace in many parts of the world. such incidents are almost a daily occurrence, making human life a cheap commodity as a means to an end in the armoury of terrorists. in the meantime, the economic effects of terrorism in almost all our countries, is also becoming very challenging. in this regard, the recent air attacks by tiger terrorists may have opened a new chapter in the book of international terrorism. if unchecked