the banks have taken to implement ring - fencing and their level of compliance. we will also assess the extent to which the new regime is meeting the aims set by government. this complements the independent review of ring - fencing required by the legislation to be started before 2021. while implementation has progressed smoothly, the pra will pursue instances of non - compliance which could affect our ability to meet our objectives using the pra ’ s existing supervisory and enforcement tools, including those available under the senior managers regime. in cases of severe non - compliance, the legislation empowers the pra to use a group restructuring tool – known as ‘ electrifying ’ the ring - fence – which enables the pra to require a banking group to sell its ring - fenced bank or other parts of its group, subject to government consent. as sam woods, the bank ’ s deputy governor for prudential regulation and ceo of the pra, said at mansion house last month, these powers, and our ongoing supervisory activity, will help ensure the ring - fence does it job. 8 conclusions in less than six weeks, ten years on from the financial crisis, one of the largest ever reforms to the structure of the uk banking industry comes into force. while most will notice little difference on day one, ring - fencing the largest uk banks has involved significant changes behind the scenes. this reform will make the provision of core banking services more resilient, and protect taxpayers from further bail outs. these are real benefits but are conditional on the ring - fence being maintained over time, meaning this will be a continuous process for both the pra and the banks. prudential regulation authority ( 2018 ), the pra ’ s approach to banking supervision, ( october ), chapter 5. woods, s., ( 2018 ), ‘ good cop / bad cop ’, speech available at https : / / www. bankofengland. co. uk / speech / 2018 / sam - woods - mansionhouse - city - banquet. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx

spencer dale : inflation targeting and the monetary policy committee ’ s forward guidance speech by mr spencer dale, executive director, monetary policy, and chief economist of the bank of england, at the international journal of central banking annual conference, “ inflation targeting and its discontents ”, warsaw, 6 september 2013. * * * a central theme of this conference has been to highlight potential shortcomings of inflation targeting and to consider potential alternatives. i believe that the traumatic events in the uk economy over the past five years have, in fact, strengthened the case for inflation targeting. the credibility of the inflation target has played a crucial role in anchoring inflation expectations over the past five years, a period in which inflation has been consistently above target. that credibility has been vital in giving the monetary policy committee ( mpc ) the flexibility to loosen monetary policy aggressively in order to support growth and jobs. but while it has not constrained the mpc ’ s freedom to act in support of the economy, the inflation target, on its own, has proved less well suited to addressing some of the exceptional communications challenges posed by the sustained combination of weak growth and elevated inflation. i would highlight two in particular : the need to make clear the central role that monetary policy has played in supporting output and employment ; and the need to provide guidance about the committee ’ s view of the appropriate trade - off between bringing inflation back to target and stimulating the recovery. the forward guidance provided by the committee in august can be seen as a response to these challenges. to retain the clarity and credibility of the inflation target but to augment the framework so that monetary policy is better equipped to address the exceptional challenges currently faced by the uk economy. in this talk, i will provide a post - crisis report card for the uk ’ s inflation targeting regime and explain how the mpc ’ s forward guidance responds to some of the areas exposed as having ‘ room for improvement ’. i will also show how a threshold for monetary policy defined in terms of the unemployment rate is particularly helpful in addressing two other challenges currently facing the mpc : the uncertainty surrounding the future path of productivity ; and the need to provide greater clarity concerning the setting of monetary policy as the economy recovers. a bit of background before doing so, it is worth highlighting three features of the uk ’ s economic performance over the past five years which should be borne in mind when evaluating the performance of the uk ’ s inflation targeting framework and understanding the committee ’ s decision to provide forward rate guidance.