positions within a 60 - day period after being notified by the authorities to do so. the rule was only introduced earlier this year but it will be worth considering a similar approach in the uk. finally, there is a large missing piece to what i have said about the resolution regime, namely how it would deal with banks that operate with branches or subsidiaries in other countries, and likewise how foreign banks operating in the uk would be sorted out. there is now a great deal of attention on this issue, in the g20, in the eu and via the fsb working group on cross - border crisis management chaired by paul tucker, and rightly so. i think it is fair to say that the regimes in the us, canada, japan and the uk come closest at present to meeting a kite - mark standard, but more needs to be done in continental europe. i therefore support the recent european commission consultation calling for eu countries to adopt resolution regimes. also, i think that we are much more likely to make progress in this field by agreeing on how national regimes can fit together to deal with international banks, rather than trying to devise an international resolution regime. the key issue then is burden - sharing, and that together the national regimes provide for equitable treatment of creditors whatever their domicile. a robust set of resolution regimes should not allow for bias in favour of domestic creditors. the uk, i should stress, is not one of those countries, but we are keen to work to produce a framework of resolution regimes that allows bias in favour of domestic creditors to end. thank you for listening to an account of the uk resolution regime. it is an important development as part of making our banks more robust to failure. it sits alongside enhanced regulation and supervision, and whatever structural changes may take place in the industry. but it remains work in progress, and in an important respect always will be because it needs to be ready to respond to threats that will evolve as well. and, finally, i should tell you my motto as head of the resolution unit, namely that i am happiest when we don ’ t need to perform a resolution.

manufacturing. this is true of the uk, where manufacturing accounts for less than 15 % of gdp, but also of france, spain, the netherlands and us ( chart 2 ). 4 some have felt the blunt end of this competition from asia. but the emergence of china and others has also created opportunities. it has encouraged uk manufacturers to specialise in those products for which they have a comparative advantage over their competitors, prompting a change in structure and focus of the uk manufacturing sector. the fact that globalisation encourages this type of specialisation is one of the great benefits of having an open trading system, felt by both consumers and manufacturers. the eef, for example, remains ‘ upbeat about the future of uk manufacturing ’, especially when it comes to high value - added activities. globalisation and uk inflationary pressures the changes we have seen in uk manufacturing have occurred, in part, due to the impact globalisation has had on the relative prices of different goods and services. these changes have also had a big impact on the sources of inflationary pressure over the past decade, both here and internationally. first, as in other developed countries, the prices of goods imported into the uk have fallen relative to goods and services produced domestically. second, most markets for goods and many markets for services are now internationally ‘ contestable ’. in other words, companies are under continual pressure to keep prices down because of the threat of competition from potential rivals from around the globe and this has limited the extent to which domestic producers can raise prices even in markets where import penetration is low. third, factors of production have become more mobile. for example, increased labour migration into the uk has helped employment to grow with low wage inflation. and the ease with which production can be switched across countries has contributed towards lower costs in a wide range of services and goods which are still home grown. it is difficult to quantify the impact of these factors on inflation. it depends on the importance of imported goods in the consumer price index and on whether lower import prices are passed on to consumers. 5 in the uk in the ten years from 1994 to 2004, the price of imported goods fell on average by one per cent per annum, so the direct effect of this on the consumer price index was quite marked. this shows up in the striking contrast between goods and services consumer price inflation ( chart 3 ). but the impact of greater competition does not stop with prices. business tells us that greater competition between companies is encouraging them to protect their profits