large challenges i see. first, we have to balance the use of bis central bankers ’ speeches sensible judgement against the risk of creating undue uncertainty in our behaviour which damages your ability to do business. this is not easy i accept. it requires us almost constantly to check and test our judgements against a framework of reasonable predictability. also, it requires a greater degree of transparency from us to you, and i think from both of us to the public and investors. this is important to ensure that we can both be held to account for applying judgement in a way that is consistent with the pursuit of our objectives. i am conscious that achieving accountability in insurance supervision in the current environment is challenging because all the focus is on the banks. no visits to the treasury select committee may seem like a blessing, but we have to ensure that the accountability still holds water. on that point, frankly, i think there should have already been more accountability for how the processes of the european union could have created such a vast cost for an industry for the implementation of a directive which has not even yet been finally agreed, and for which i cannot give you a date. largely unseen in the banking crisis has been the shocking cost of solvency ii. the second challenge with the use of judgement in supervision is that elsewhere we have seen a preference to have many rules, but often ones which can then be gamed. paul volcker put it nicely in his evidence to the parliamentary banking commission. he said that people ask for clear and simple rules so that they can tell when they are in abeyance, but they typically fail to add that they want to know how to get round the rule too, but that is part of the deal. at the pra we will apply judgement rigorously ; sometimes you will agree with us, and sometimes you won ’ t. we will be clear and transparent in our judgements, and we will be accountable. finally on the issue of the pra ’ s approach to supervision, i want to assure you that we will take supervision of insurers just as seriously as we do the other lot. it is not in our nature to do otherwise. and, we are putting more emphasis on senior level contact in the new approach. we want to deliver key messages very clearly to senior management and boards, and we want to know how your governance works in practice. i will give one example of this approach in recent months, returning to solvency ii. it was clear to me by

financial stability threat, which at the bank of england we dealt with via a market intervention. it has, of course, caused us to look at the regulatory standards in this area, and recommend substantially greater resilience, which is now in place. the point i want to draw out today is that responsibility for oversight of these funds rested both in the uk where they operated and in some eu countries, including ireland, where they are typically domiciled. i want to thank the central bank of ireland for the excellent assistance they have provided in tackling these issues. our strong working relationship has paid off. the work we are doing is no doubt important. three current priorities for both of us illustrate this well. first, we are both putting in place stronger resilience standards for ldi funds. second, we agree on, and both emphasise, the pressing need for action to implement the financial stability board's recommendations for enhancing the resilience of money market funds. and third, we are both committed to the review and, i believe, upgrade of the standards for managing risks in open - ended funds, where sharon donnery is coleading the global work. i take three very important lessons from all of this. first, strong co - operation and coordination is a much better approach than fragmentation. there is no reason to be restrictive when a much better alternative exists. second, i sometimes hear an argument made that the fallacy of this first conclusion is that no - one can credibly commit with certainty to this standard of co - operation at all times in the future. i reject this proposition. let's go back to the global public good of financial stability for a moment. the stakes are simply too high to throw away financial stability, and the global institutional structures now create the necessary commitment. 3 / 4 bis - central bankers'speeches the third argument is part of the co - operation and commitment point, but sufficiently important to draw out separately. i am going to be direct here – i usually am. it is said that there is an over - dependence on the uk as an international financial centre. by the way, dublin is a thriving international centre too, and that's good to see. the overdependence argument leads, wrongly in my view, to a belief that the dependency needs to be reduced. as i have already said, the responsibilities that go with a global public good argument point firmly against the logic of this point. but, as the ld