mark carney : the uk at the heart of a renewed globalisation speech by mr mark carney, governor of the bank of england and chairman of the financial stability board, at an event to celebrate the 125th anniversary of the financial times, london, 24 october 2013. * 1. * * introduction when the financial times opened for business in 1888 london was the world ’ s preeminent financial centre. it had the most international banks, the largest capital markets, and the deepest money and gold markets. it backed projects all over the world, and most of world trade was financed by bills drawn on london. supporting the critical mass of banks, insurers and investors was an army of solicitors, accountants and clerks. 1 what london had lacked, at least until the ft ’ s great rival financial news was founded in 1884, was a ready provider of financial news. the ft famously set out to report “ without fear and without favour ”, and declared itself to be the friend of the honest financier, the respectable broker and the legitimate speculator ; and the enemy of the closed stock exchange, the unprincipled promoter and the gambling operator. perhaps as a consequence, its initial circulation was modest. the preoccupations of 1888 were not very different than today. editions of the ft 125 years ago contained stories on economic development in china, the health of spanish government finances, and the state of irish banks. what is clear in those early editions is the decidedly international flavour of a london investor ’ s interests – from tramways in buenos aires to copper mines in portugal. since then, london has been a truly international financial centre. in 1913, at the twilight of the last great wave of globalisation, 71 foreign banks had london offices. a century later, there are nearly four times as many. today, almost twice as much international banking activity is booked here as anywhere else. london is the home of global markets as well as global banks. almost half of all turnover in over - the - counter ( otc ) derivatives takes place here. london ’ s share of global foreign exchange turnover is almost as high and it remains a major hub for trading in gold. uk insurance companies have around 10 % of the global market. 2 extending the net further, the uk is home to the third largest “ shadow banking system ” with assets of $ 9 trillion. 3 the emergence of london as a financial centre in the nineteenth century owed a lot to the uk ’ s position

and academic economists to observe the decision - making process and provide comments on potential areas of improvement. 7 a recent study by the bis indicated that the bank has self - commissioned more reviews than any other central bank. 8 one further avenue of review is to assess our own forecasting performance. 9 reviews of forecast performance help to update our understanding of economic relationships, evaluate risks to the current outlook and identify areas where we could improve our accuracy. the bank will always make forecast errors, reflecting the uncertainties in assessing the current state of the economy and its outlook. for example, the vast majority of forecasters were unlikely to have been able to accurately predict the sharp decline in oil and export commodity prices that occurred over 2014 and 2015 – one factor that has led to current low see : rbnz ( 2001 ). ‘ the monetary policy decision - making process ’, independent review of the operation of monetary policy supporting paper ; rbnz ( 2007 ) above. these visitors will often present a paper containing views on the decision making process and recommendations to improve the process. bis ( 2016 ), ‘ self - initiated reviews of the central bank ’ s policy performance ’, background note for the february 2016 meeting of the central bank governance group. past forecast performance reviews include : mccaw s and ranchhod s ( 2002 ), ‘ the reserve bank ’ s forecasting performance ’, reserve bank of new zealand bulletin, vol. 65, no. 4 ; turner j ( 2006 ), ‘ an assessment of recent reserve bank forecasts ’, reserve bank of new zealand bulletin, vol. 69, no. 3 ; labbe f and pepper h ( 2009 ), ‘ assessing recent external forecasts ’, reserve bank of new zealand bulletin, vol. 72, no. 4. bis central bankers ’ speeches inflation. to further illustrate the point, figure 2 shows the bank ’ s central outlook for annual gdp growth and the error bands around this estimate implied by our past forecast errors. figure 2 june statement annual gdp growth forecast and error bands note : the error bands displayed above reflect the direction and magnitude of the bank ’ s past annual gdp growth forecast errors at different forecast horizons, calculated over the period 2010q1 - 2016q1. to set the range of the error bands, the bank ’ s forecast ( in blue ) is adjusted for bias using the bank ’ s mean forecast error at each relevant horizon. the error bands are then set symmetrically relative to this bias adjusted forecast, using the standard deviation of the