the fox and the hedgehog : preparing in a world of high risk and high uncertainty speech given by charlotte gerken, executive director, insurance supervision insuranceerm risk and capital emea virtual conference 3 december 2020 i would like to thank alan sheppard, zachary morris - dyer, gareth truran, anthony brown, robin swain, manuel sales, olga filipenko and sarah o ’ sullivan for their assistance preparing these remarks. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice good morning. thank you to insurance erm for inviting me to speak at your conference. when i told a colleague i had been asked to give a talk on responses to risk, he told me : “ the fox knows many things ; the hedgehog knows one important thing. ” i was curious to learn more : this idea came from a fragment of text by an ancient greek poet archilochus of paros ; it inspired isaiah berlin ’ s 1953 essay on tolstoy ’ s view of history ; and has been used in jim collins ’ s book from good to great. what it boils down to is a way of thinking, one that guides how you prepare for and respond to risk : the fox looking at every eventuality ; the hedgehog ’ s one big idea being to curl into a ball and wait for the peril to pass. i ’ m left with the image of the fox hopping about and getting ever more frustrated as it schemes how to get at the hedgehog. today i will take a look at some of the tactical steps we have taken around the financial markets and macro - economic impact of covid - 19 on insurers. and go on to more strategic responses to this and other structural changes, focussing on developments in stress testing and scenario analysis. there have been times this year when it ’ s been hard to resist the temptation to react to unfolding events with the hedgehog ’ s one big idea. unfortunately, there have been few places where curling up in a ball would not have left you in the path of a massive juggernaut. deploying our fox brain we have learned many things and responded tactically to the varying ways the financial markets, macro - economic, and business operational impacts from covid - 19 are affecting us. for example, ( 1 ) in the early phases of the pandemic in the uk, the prudential regulation authority ( pra

: the cpmi received multiple responses to its october 2021 call for ideas on expanding payment - versus - payment for fx transactions. these responses have helped inform a consultative report that will be published in the summer. building block 10 : the reserve bank of australia is working towards expanding access to domestic payment systems for non - bank payment service providers ( psps ). [ 10 ] and the central bank of india has reviewed access criteria in 2021 and expanded access to certain categories of non - bank payment system operators. building block 12 : the us fed has extended fedwire operating hours in 2021, it is now operational for 22 hours per day, 5 days per week. [ 12 ] the european central bank is planning to extend operating hours as part of the go - live of the consolidation project in november 2022. building block 13 : in may 2022 sveriges riksbank and tips have established a connection with the goal to use tips services to settle non - euro currencies in central bank money. building block 14 : the european central bank is migrating to iso in real - time gross settlement ( rtgs ) payments in november 2022, [ 14 ] with the bank of japan having already migrated to iso and completing version upgrade in 2025. to support further progress, in may 2022, the cpmi published reports on expanding access and extending operating hours. [ 15 ] these relate to two foundational building blocks that can enable the progress of many other building blocks of the roadmap. today i want to discuss why these two reports are critical and how central banks, industry and public authorities can play a key part in advancing the roadmap. how improving direct access can enhance cross - border payments the building block 10 report assesses the benefits and risks of expanding access to domestic payment systems in particular rtgs systems. expanded access could enable non - bank psps, financial market infrastructures ( fmis ) and foreign banks to gain direct access to the payment systems they rely on to provide payment services to end - users, without relying on an intermediary ( who maybe also be a competitor ). according to a cpmi survey, approximately 30 % of the payment systems allow non - bank psps and fmis direct access [ 16 ] and 28 % reported have made significant changes to their direct access policies since 2010. and despite the fact that the 61 % of payment systems that are considering to expand access within the next 5 years, only 7 % have concrete plans to do so. expanding