about dot. com this and e - that is overdone, and certainly some of the current it stock valuations seem to build in expectations not readily captured by traditional valuation methods. but in the financial markets, i think if anything the effect of the electronic revolution will exceed even the boldest predictions. i am told that there is at least one major securities house which is assessing the ongoing viability of each of their current functions in a future where both data storage and data transmission are characterised by infinite capacity and zero cost. if the function adds value even under such a scenario, then it will be retained, but if not, then the house concerned sees no long - term future for it. i think the challenge facing financial markets and market participants is to identify where they can add value and which services the consumer will continue to pay for : not all will pass the test and survive. my third theme combines both my earlier ones, and concerns the role of market intermediaries. disintermediation is an ugly word, but it is a trend that exists today and will i am sure continue to grow in importance. electronic secondary trading of securities is becoming more common, and we have also begun to see electronic primary distribution - the issuance of securities on the internet, and, in some cases, without the involvement of an issuing house. now some people see in this a threat to markets themselves : everything, they fear, will migrate to the web and fragment, with a loss of the transparency and regulatory framework that organised and official markets provide. i do not share this view, nor do i think that there is no future role for markets and market intermediaries. but i do think that the marketplace of 10 years hence will be very different from the one we have now - just as the screen - based markets of today are very different from the physical market floors of the past. earlier i offered you a possible motto for central bankers. let me complement that with one for markets : “ adapt and survive ”. but let me add the positive rider - “ those who survive will thrive ”. what is the role of the authorities in this future i have described? it is, very simply, to provide as best we can the economic and regulatory environment in which financial markets can do their job - of allocating capital to where it can be most productively deployed - more effectively. on the economic front that means steady growth with low inflation. on the regulatory front it means a framework of rules that

provide for the transparency that is essential for the proper assessment and management of risk and sets clear behavioural standards which do not unnecessarily distort business decisions but provide clear guidance to market participants - whether they are end - users or intermediaries - as to what is expected of them and what they can reasonably expect of others. the picture i have painted is one of challenge and change. the flip - side of course is great opportunity. in fact there has never been a time when the markets here in london did not face change and uncertainty. but there has never been a time either when you, we, all of us, did not rise to the challenge. i am sure we will all do so again - and i wish you all possible success.