got underway in earnest from the mid1980s, a widely perceived stumbling block was that central bank officials could not account personally for their decisions on the floor of the house ( of commons ). there was a democratic deficit. resolution came via the political cost of the failure of other approaches to monetary policy, in which ministers running for re - election decided rates ; the happenstance of the development during the 1980s and 1990s of influential committees of parliament, before which central see http : / / econ2008. bankofcanada - conference. ca / wp - content / blinder. pdf bankers could ( and frequently do ) appear ; and specific design features of the monetary regime itself. 2 those included - parliament, in legislation, enshrining the goal of price stability, and requiring the bank to publish a quarterly report on the outlook for stability - the executive arm of government deciding the definition of price stability ( 2 % cpi inflation target ) and setting out requirements for the bank to explain publicly what is going on if the target is missed on either side by more than 1pp - the committee comprising four ‘ external ’ members as well as five internal ( or ‘ executive ’ ) members. the external members were necessary to legitimise giving such an important function to the bank. ‘ one person / one vote ’, with transparency, was a mechanism for attracting high - quality ‘ externals ’ and for ensuring that the introduction of ‘ new blood ’ made a difference – that it did let in ‘ fresh air ’ and bring useful expertise to the table. and, of course, the system of individual voting had to carry across to the ‘ internals ’ too. indeed, as most studies show, there is no difference between internal and external members in our decision - taking. the burden of that rehearsal of some uk institutional history is this : that, in comparing central bank practices, we should not think of our various decision - taking structures solely as technical solutions to the shared technical problem of deciding a path for rates. rather, our varying structures are efforts to solve that shared technical problem in the context of varying histories and social and political structures. we should understand each other, and adopt and adapt what could usefully travel across borders, but not proselytise. communications, and forecasts if, adapting mike woodford, monetary policy is nearly all about expectations, then communication matters hugely in real - world policy making ( a world in which rational expectations don ’ t hold and so one in

a more stable world public policy must still determine the best use of tools – for instance, advocating ever tougher stress tests and larger liquidity buffers in an attempt to cover future black swans is not obviously preferable to having tools by which central banks can make temporary and targeted interventions, as we did last october. this underlines my earlier point that strong institutions of prudential policy ( macro and micro ) are important to enable these decisions to be made. let me end with the short version of the main points : 1 : i don't believe we face a systemic banking crisis ; 2 : we must ensure that financial stability continues to mean that monetary policy takes into account financial conditions but does not have to aim off for instability ; 3 : this requires robust structures for financial stability policymaking ; 5 / 6 bis - central bankers'speeches 4 : central bank balance sheets will remain larger than pre - crisis for financial stability reasons ; 5 : we don't know yet where central bank balance sheet reduction will need to stop in terms of the necessary level of reserves ; 6 : this will in part depend on the desired future size and make - up of banks'liquidity buffers ; 7 : stable coins will need to have the characteristics of, and be regulated as, inside money ; 8 : the key question on retail digital money is can we envisage a demand for it, but we should guard against failure of imagination ; and be able to accommodate it within the regulatory framework ; 9 : if retail digital money is part of the future, it would be better not to disturb the need to have both inside and outside money – so we cannot rule out a need for cbdc ; 10 : we will need to revisit the protection of inside money in the form of deposits, especially in smaller banks ; 11 : stress testing the financial system is crucial, but stress tests will not always deal with black swans – that's why resolution and other policy intervention tools must be in place ; 12 : non - bank financial intermediation is a very large and heterogeneous landscape – it presents surveillance challenges of both breadth and depth ; 13 : nbfi leverage and inter - connectivity can be hard to map ; 14 : nbfi issues are often inherently cross - border in nature. the role of the fsb is important ; 15 : macro and micro - prudential policies need also to support lending to and investment in the economy ; good luck with the roundtable today. thank you