can assure foreign banks ’ chief executives that we have no plans to upgrade our regulatory dress code to white - tie - only, and we can assure our colleagues in the eu that we have absolutely no desire to take off our clothes! but what will be the british style in this area? the pra and the wider bank stand ready to support this debate if and when it begins. i would urge all those involved to give serious consideration to the principles set out above, and to using an existing british approach, in the form of the model adopted for introducing the smcr, to deliver them. 3 see for instance andrew bailey ’ s speech : https : / / www. fca. org. uk / news / speeches / future - financial - conduct - regulation all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx illustrative annex 1 : illustration of different approaches to financial regulation, by degree of discretion granted to regulators uk pre1979 banking acts 1979, 1987 fsma 2000 framework senior managers and certification regime on - shored eu regime ring - fencing uk uk domestic initiatives – 2013 banking reform act lamfalussy de larosiere single rulebook other bcbs countries eu less discretion for regulators more discretion for regulators all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx eu crosscountry

but only if it is appropriately controlled and governed. our recent moves to ring - fence retail banking, and other expectations ( some going back to 2014 ) that firms will subsidiarise material retail banking and insurance businesses, are a vital part of what enables us to take this approach safely. 3. proportionality and sensitivity to business models, and promoting competition. we have, for better or for worse, adopted a system in which financial companies are privately or mutually owned and then regulated in the public interest in order to make them internalise costs which might otherwise be borne by others. an analogy is sometimes drawn with pollution : the factory is encouraged to generate wealth for its owners by employing people to make products that people want to buy, but it cannot have a free pass to pour waste chemicals into the river. it follows inevitably from this that there will be tensions and arguments between regulator and regulated. however, these frictions should not be bigger than they have to be – in other words, we should aim for a system in which the burdens on firms created by our regulation are no greater than they need to be to achieve the objectives set by parliament. part of this is about the ability to adapt regulation for different types of businesses, as given the enormous diversity of financial firms operating in the uk it is unlikely that one size will fit all in all cases. the other side of this coin is that we cannot run a zero - failure regime. 4. dynamism and responsiveness. sometimes these words – “ dynamism ”, “ responsiveness ” and indeed “ proportionality ” above – are understood to imply weak regulation, which unsurprisingly we at the bank are firmly against. so because of this danger of a whiff of weakness we have thought very carefully about whether it is important to have something like this as part of our list of principles. we have concluded that it is necessary for a simple reason : the financial system is an extraordinarily adaptive organism and is constantly changing. sometimes this is for good reasons, for instance as it adopts new technologies in order to deliver a better product. surely many of us would find it intensely irritating to go back to needing a laptop to check our bank balance rather than doing it through the app on our phones, or indeed – if we jump another generation back – to have to go into a branch to arrange a payment, although branches are still very important for many all speeches are available online at www. bankofengland.