imagine, as an extreme example of a focused approach, a regime based on a single risk - insensitive capital requirement. that would be very simple, but the requirement would probably have to be set very high to satisfy us that it provided the same level of resilience as the current regime. a streamlined approach, on the other hand, might include simpler versions of current pillar 1 and pillar 2a risk weighted capital requirements with broadly the same calibrations as are applied today. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice we therefore face a trade - off between simplicity and calibration. a focused approach would impose the fewest requirements, but those that were applied might have to be conservatively calibrated in order to maintain resilience. a streamlined approach would lead to less conservatively calibrated, but more complex requirements, when compared to the focused approach. figure 1 illustrates this trade - off, along with a second trade - off between simplicity and minimising barriers to growth. this second trade - off arises because a focused approach would be very different to the requirements a growing firm would face after it moved out of the simpler regime. it might therefore be more difficult for a small firm to grow out of a focused regime, as it would effectively have to gear up to meet a whole new set of requirements. figure 1 : illustration of the characteristics of a ‘ focused ’ and a ‘ streamlined ’ approach in practice, there are a spectrum of approaches we can take between the extreme cases of a very focused approach which is like the requirements we have in place for credit unions, and a slightly streamlined approach which is almost the same as requirements for larger banks and building societies. and different approaches might work better for different sorts of requirements. for example, the right approach for capital requirements might differ from the right approach for liquidity requirements. what this way of describing different approaches provides us with is clarification of the choices and trade - offs we face. the discussion paper asks for your views about how these trade - offs should be managed. if a fully focused approach based on a very small number of conservatively calibrated requirements represents one extreme, all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice and a modestly streamlined approach which trims a few elements from the current rulebook represents another,

yourself the question “ how would the financial system have fared if covid had hit in 2007? ” to appreciate the importance of the resilience that has been built up over the last decade. combining a financial crisis with a health and economic crisis would have been profoundly damaging. the building society sector has of course been a very important part of this picture. with more than 25 million members and an average cet1 ratio of more than 26 %, the building society sector was well placed to weather the storm from a financial resilience perspective, extending more than £66 billion of new loans in 2020 and offering a peak of more than 300, 000 payment deferrals to customers in financial difficulty. from an operational perspective, societies also adapted quickly to lockdowns and home - working arrangements, with almost all society branches continuing to serve their members through the pandemic. but the disruption caused by covid - 19 has shown why it is critically important for firms to identify the key services they provide and invest in their resilience. societies – like all of 1 / 5 bis central bankers'speeches us – have witnessed an acceleration in technology innovation over the last year. continuing to build on these developments and incorporating them into operating models will be important, both for the sector ’ s operational resilience, but also for serving the evolving needs of the sector ’ s members. as we sit here today, the outlook looks better than we might have expected a year ago. but a considerable amount of uncertainty remains, not least as many of the bridging measures put in place by the authorities begin to roll off. though it may now look less likely, additional financial and operational pressures may still be on the horizon, and we will be monitoring that closely. but in the meantime i thought it might be worth us raising our sights a little and having a look at some of the regulatory issues that lie on the other side of the bridge : strong and simple, leverage, mrel and mortgage floors. strong and simple i ’ ll start with strong and simple. avid followers of my speeches – of which i am regularly assured there are at least three across the country, one of whom is robin – might recall that in november last year i gave a speech titled ‘ strong and simple ’. indeed, it turns out that robin is such an avid reader of my speeches that he has themed this entire conference day as ‘ strong and simple ’! i ’ m not quite sure what to make of that