BANKING

To ripple (through smh) –

To incur losses – понести убытки
Extortion – вымогательство
To evaporate – испариться
To plummet (stock prices plummeting) – падать
Bailout package – финансовая помощь
To default on – не выполнить обяз-ва
A middle man – посредник
To be up one’s street – быть по душе
Credit union – кредитный кооператив (provides traditional banking services)
To insure deposits – застраховать вклады
Money supply – денежная масса
To inject smth in (to stimulate) – влиять
To put in circulation – ввести в обращение
To bail out – выручить
Key interest rate – ключевая ставка
Spreading of risks – распределение рисков
to be in red – быть в минусе
liquid assets – ликвидные/текущие активы (assets that can be easily converted to cash)
to back up – обеспечить (to be backed up – быть обеспеченным)
face value – номинальная стоимость
take smth at face value – верить на слово
demand outstrips supply – спрос превышает предл-е
to force prices up – повышать цены
value eroded (degradation) – цены подорваны
trust begins to drain – доверие иссекает
inflation – a situation when demand outstrips supply, prices rise and value of money decreases
deflation – the opposite of inflation; supply outstrips demand and prices tend to fall
to keep inflation in check/ to control the rate of inflation – сдерживать/контролировать уровень
инфляции (rate of inflation in Rus- 4%; in England – 2%)
macroprudential policy – макропруденциальная политика (policy, aimed at ensuring the stability of
the financial system as a whole to prevent substantial disruptions in credit and other vital financial
services necessary for stable economic growth)
monetary policy – денежно-кредитная политика (a set of tools used by a nation's central bank to
control the overall money supply and promote economic growth and employ strategies such as revising
interest rates and changing bank reserve requirements)
to maintain financial stability – поддерживать финансовую стабильность
changing interest rates – изменение процентных ставок
consumers – потребители
print and issue currency – печатать и выпускать валюту
clearing cheques – расчет по чекам
to settle debts – погасить долги
to supervise – контролировать/осуществлять надзор (the Central Bank supervises and regulates the
banking system and the whole financial sector, also collects financial data, publishes statistics and
provides financial info for consumers, also supervises policies of most commercial banks, changes the
reserve-asset ratio (соотнош-е резервов к активам)
To keep reserves – сохранять резервы
To withdraw money – снять деньги (to deposit money – внести)
Bank run or a run on the bank – situation, when depositors think that a bank is unsafe and they might
try to withdraw all their money)
Lender of last resort – кредитор последней инстанции (central bank is a lender of last resort, which
means it can lend money to financial institutions in difficulty to allow them to make payments)
In difficulty – испытывающим трудности
To convert currency into
To intervene (on the currency markets) – вмешиваться на валютные рынки
Move the rate up or down – повышать или понижать курс
Demand – спрос (an economic concept that relates to a consumer's desire to purchase goods and
services and willingness to pay a specific price for them)
Supply – предложение (economic concept that describes the total amount of a specific good or service
that is available to consumers.)
To prevent domino/chain effect/ripple effect on economy – предотвратить эффект домино на
The international banking system is an enigma. There are more than 30.000 different
banks world wide, and they hold unbelievable amounts of assets. The top 10 banks
alone account for roughly 25 trillion US-Dollars. Today, banking can seem very
complex, but originally, the idea was to make life simpler.
11th century Italy was the centre of European trading. Merchants from all over the
continent met to trade their goods, but there was one problem: too many currencies in
circulation. In Pisa, merchants had to deal with seven different types of coins and had to
exchange their money constantly. This exchange business, which commonly took place
outdoors benches, is where we get the word "bank" from; from the word "banco", Italian
for "bench". The dangers of travelling, counterfeit money and the difficulty of getting a
loan got people thinking. It was time for a new business model: home brokers started to
give credit to businessmen, while genevese merchants developed cashless payments.
Networks of banks spread all over Europe, handing out credit even to the church, or
European kings. What about today?
In a nutshell, banks are in the risk management business. This is a simplified version of
the way it works. People keep their money in banks and receive a small amout of
interest. The bank takes this money, and lends it out at much higher interest rates. It's a
calculated risk, because some of the lenders will default on their credit. This process is
essential for our economic system, because it provides ressources for people to buy
things like houses, or for industries to expand their businesses and grow. So banks take
funds that are unused by savers, and turn them into funds society can use to do stuff.
Other sources of income for banks include accepting saving deposits, the credit card
business, buying and selling currencies, custodian business and cash management
services.
The main problem with banks nowadays is, that a lot of them have abandoned their
traditional role as providers of long-time financial products, in favour of short-time gains
that carry much higher risks. During the financial boom, most major banks adopted
financial constructs that were barely comprehensible and did their own trading in habit
to make fast money, and earn their executives and traders millions in bonuses.
This was nothing short of gambling and damaged whole economies and societies.
Like back in 2008, when banks like Leeman Brothers gave credit to basically anyone
who wanted to buy a house, and thereby put the bank in an extremely dangerous risk
position. This led to the collapse of the housing market in the US and parts of Europe,
causing stock prices to plummet, which eventually led to a global banking crisis, and
one of the largest financial crises in history. Hundreds of billions of dollars just
evaporated. Millions of people lost their jobs and lots of money. Most of the world's
major banks had to pay billions in fines and bankers became some of the least trusted
professionals. The US government and the European Union had to put together huge
bailout packages to purchase bad assets and stop the banks from going bankrupt. New
regulations were put into force to govern the banking business,
compulsary bank emergency funds were enforced to absorb shocks in the event of
another financial crisis. But other pieces of tough new legislation were successfully
blocked by the banking lobby.
Today, other models of providing financing are gaining ground fast. Like new investment
banks, that charge a yearly fee and do not get commissions on sales, thus providing the
motivation to act in the motivation in the best interests of their clients. or credit unions -
cooperative initiatives that were established in the 19th century to circumvent credit
sharks. In a nutshell, they provide the same financial services as banks, but focus on
shared value rather than profit maximisation. The self proclaimed goal is to help
members create opportunities like starting small businesses, expanding farms or
building family homes while investing back into communities. They are controlled by
their members, who also elect the board of directors democratically. World wide, credit
union systems vary significantly, ranging from a handfull of members to organisations
with several billion US-Dollars and hundreds of thousands of members. The focus on
benefits for their members impacts the risk credit unions are willing to take, which
explains why credit unions, although also hurting, survived the last financial crisis way
better than traditional banks.
Not to forget the explosion of crowdfunding in recent years. Aside from making
awesome video games possible, platforms arosed that enabled people to get loans from
large groups of small investors, circumventing the bank as a middle man. But it also
works for industry - lots of new technology companies started out on kickstarter or
indiegogo. The funding individual gets the satisfaction of being part of a bigger thing,
and can invest in ideas they believe in. While spreading the risk so widely, that, if the
project fails, the damage is limited. And last but not least, micro credits. Lots of very
small loans, mostly handed out in developping countries that help people escape
poverty. People who were previously unable to get access to the money they needed to
start a business, because they weren't deemed worth the time.
Nowadays, the granting of micro-credits has evolved into a multi-billion dollar business.
So, banking might not be up your street, but the banks' role of providing funds to people
and businesses is crucial for our society and has to be done. Who will do it and how it
will be done in the future is up for us to decide, though.

The Bank of England is the central bank of the United Kingdom. We're different to a bank you would
come across in the high street. That means we don't hold accounts or make loans to the public. We
issue banknotes that you spend in shops. There are over 3 billion of these notes in circulation, worth
over 60 billion pounds. We set the official interest rates for the United Kingdom and it’s called Bank
Rate. It directly influences the cost of savings, loans and mortgage rates. The Bank of England also keeps
a close watch on the financial system, so you can have confidence that your money is safe in good and
bad times.
Roles. The Bank of England has been issuing banknotes for over 300 years. They were initially IOUs for
gold deposited at the Bank. People then used these notes to pay for things, knowing they were backed
by 'The Promise' to pay the equivalent value in gold. That is no longer possible. So, what is it that gives
banknotes that face value? In a word - trust. We trust that banknotes can be exchanged for things we
want to buy, that they will be accepted by others for their face value. Maintaining the value of money is
one of the most important jobs of the Bank of England. It starts by ensuring that genuine banknotes are
very hard to copy to stop the chance that fake notes could undermine trust in the real thing.
Counterfeit notes are worthless. It's the Bank's job to make life difficult for counterfeiters. All notes are
printed on specially developed materials that are not only hard wearing but also gives them a unique
feel. They also have a range of security features including holograms, metallic threads, watermarks and
raised print. All this is very hard to reproduce and makes the notes extremely difficult to copy. But it
also makes it easy for everyone to see and feel whether a note is real or not. And this, of course is vital if
the note is to retain its value. But this is only one way in which the Bank protects the value of our
money.
The value of your money depends on what you can buy with it and this is determined by the prices you
pay for things. The more people want something, the higher the price will become and the more easily
available something is, the cheaper it becomes. This adjustment in prices in response to supply and
demand goes on all the time throughout the economy. Some prices rise, some fall. That's normal.
However, if there's too much money in the economy as a whole, with spenders wanting to buy more
things than can be produced, then everything can start to cost more: demand outstrips supply; prices in
general rise and the value of money decreases. That's inflation. We start to save less and spend more
because we think that our money will buy less tomorrow. We also need to be paid more to maintain our
standard of living, which increases the costs to businesses forcing up prices still further. A spiral of rising
costs and prices can develop. With high inflation, it's hard to compare prices. The market economy no
longer operates effectively. The value of savings is also eroded and companies become reluctant to plan
ahead, to invest or create jobs. The same thing can happen in reverse when people spend too little -
supply outstrips demand; prices tend to fall. People wait for prices to fall further which makes prices
spiral downwards. This is deflation. Both circumstances are bad for the economy, business and people. It
is the Bank of England's job to keep prices stable, maintaining the value of our money.

The total amount of spending affects the rat of inflation: too much and inflation can rise as the economy
overheats; too little and inflation can fall as the economy contracts - a recession. So the Government has
given the Bank of England the job of maintaining inflation at a steady rate of 2%. 2% is the target but
inflation will fluctuate due to unexpected events and influences. To stop prices rising too fast, the Bank
reduces the amount of spending in the economy by adjusting the cost of money. It does this by setting
the interest rate on its dealings with financial institutions. This in turn affects the rate on savings,
mortgages, overdrafts and other loans. All of this influence how much is spent and saved, and in turn
inflation. If the Bank expects inflation to be above the target it raises interest rates. People have to pay
more for the money they have borrowed and have less to spend. Some people might decide to save
more. The growth in demand will gradually fall, reducing the upward pressure on prices. If the Bank
expects inflation to fall below the target it will reduce interest rates to boost spending. People will pay
less on their loans and have more to spend. Others may decide to save less. Changes in interest rates
can take up to two years to have their full impact on inflation so the Bank has to look ahead to judge
what it thinks inflation will be rather than look at what it is now. This is not an exact science because
judgments have to be made about the future and that always involves uncertainty and unexpected
events. If interest rates are very low and the Bank thinks inflation is still likely to fall below the target, it
can inject extra money into the economy directly to stimulate demand.
It can do this through Quantitative Easing. The Bank creates new money electronically to buy
government bonds and high-quality debt from financial institutions like pension funds. This cash
injection lowers the cost of borrowing and boosts asset prices, supporting demand and getting inflation
back to target. When conditions allow, the Bank can sell the bonds to reduce the amount of money in
the economy if inflation looks like being too high. Maintaining the value of money is the Bank of
England's job. Our trust in the value of money is preserved and 'The Promise' is kept.

Every time we use money, we interact with the financial system in some way. It's central to our daily
lives. So its reliability and stability is as important as maintaining the value of money. Financial
institutions such as banks allow us to exchange money with others - making millions of regular payments
and transactions, buying in the shops and online, paying bills, getting paid and so on. But they also
perform two other vital tasks. They connect those who have money to save and invest and those who
need money to borrow - be it for a mortgage or business growth. And they also allow people to insure
against the risks they face in their businesses or daily lives. And risk is an integral part of the financial
system. When a bank takes our savings and lends them, it converts money that is available for instant
withdrawal, into lending that can be tied up for years. Not only is it now less accessible but if things go
wrong it may not come back at all. Banks need to manage these risks and they monitor their lending
carefully, spreading the risks across many loans to differing sectors. They also have to be able to
withstand loans going bad. Shareholders' capital - the value of their stake in the bank - does that job.
Banks need enough capital to provide a strong basis for their lending in case things go wrong. And to
manage all the potential flows of money in and out of banks, they have to have a stock of cash and other
liquid assets to make payments. Maintaining the right ratio between liquid assets - cash, or assets that
can be turned into cash easily - and loans and other investments is crucial if banks and other financial
institutions are to be secure. What keeps the whole thing afloat is our confidence that if we put our
money in, we'll be able to get it out again. Banks and other financial institutions need to be in good
shape so they can keep providing vital services to the rest of us, even in difficult times.

Banks and other financial institutions don't just lend to us. They also lend and borrow to and from each
other. This lending, along with all the payments made between banks to transfer money around,
means the financial system is all linked together. It's a massive flow of money, along a huge labyrinth of
channels. A hold up in payments getting through in one place can very quickly affect others further
on downstream. So to manage their money, banks will often borrow short term, including overnight,
from one another and occasionally from the Bank of England to ensure they have sufficient
funds to make payments that are due on a day-to-day basis.
Confidence is the water that keeps the system flowing, confidence that if you put your money in, you
will be able to get it back again. But if doubts creep in, depositors might start to withdraw their money,
and other banks will be less likely to want to lend money.
In the 2007 financial crisis, doubts spread that the loans that many banks had made were going to be
repaid. Banks became nervous of each other, not knowing the health of others' loans and the extent of
possible losses. Confidence began to drain from the system and the financial system started to become
unstable. Lending between banks dried up and losses mounted, making it impossible for many banks
to cope. The entire system almost ground to a halt and required a massive amount of support from
the government and Bank of England to inject money to boost capital and liquidity. The Bank's job is to
spot those vulnerabilities and risks well in advance, maintaining confidence and stability. Much
needed reforms were made in 2013 to make this job easier in the future.

The bank of England's job is to look after the financial system as a whole. Legislation in 2013 gave the
bank more powers to tackle risks and weaknesses across the system. The bank stands ready to lend to
institutions that have a short term need for extra money to manage payments. This is known as liquidity
insurance. In very difficult circumstances it can decide whether to offer temporary fund as lender of last
resort to manage short term cash problems. The bank also takes a lead role in dealing with severe
problems of banks through this special resolution regime. It can help to sell, transfer or wind up failing
institutions, depending on the nature of the problems. The market must be allowed to exercise its own
discipline and this means that it's important that financial institutions are allowed to fail when we
they're weak or badly run. But that needs to be orderly, so it doesn't jeopardize the rest of the financial
system and damage the economy. That principle is important to the way the Bank of England regulates
individual financial institutions. The focus of the banks work is to improve their safety and soundness so
that they are run in a Safe way. The bank also keeps a sharp look out for risks and vulnerabilities across
the financial systems as a whole, such a sign of overexuberant lending or excessive use of risky financial
instruments. This system wide approach is known as macroprudential policy. The bank aims to ensure
the system as a whole can cope with problems. Banks have to be capable of absorbing losses, so public
money isn't needed to bail them out. If risks are increasing the bank might, for example ask banks to
raise more capital as an extra buffer in case things go wrong. All this puts the Bank of England at the
heart of ensuring that the financial system is able to deliver the key financial services to the wider
economy and support economic growth in good times and bad.

How the bank works? The Bank of England operates in two key areas. It must set interest rates to keep
inflation in line with the Government's target and it must monitor and take action to reduce risks to
maintain financial stability. These responsibilities are shared between three important bodies: the
Monetary Policy Committee (MPC); the Prudential Regulation Authority (PRA); and the Financial Policy
Committee (FPC). All are chaired by the Governor of the Bank of England. The Monetary Policy
Committee is made up of nine members: five from within the Bank and four external members
appointed by the Chancellor of the Exchequer. The role of the external members is to give the
Committee access to the thinking and expertise beyond the Bank itself. The MPC meets to monitor
developments in the economy so it can set interest rates and adjust the amount of money in the
economy to meet the Government's inflation target of 2%. The minutes from these meetings are
published so everyone can see how each individual voted. Once every three months the Committee
publishes its Inflation Report which shows in more detail how the Bank of England judges the outlook
for the economy and inflation.
The Prudential Regulation Authority is part of the Bank. It regulates individual financial institutions to
improve their safety and soundness. The Financial Policy Committee's job is to assess the risks facing the
financial system and the actions needed to tackle them. It meets formally at least four times a year and
publishes records of its meetings and twice-yearly Financial Stability Reports. The FPC has ten members,
five from within the Bank and four external members again appointed by the Chancellor. The Chief
Executive of the Financial Conduct Authority is also a member. The FCA is an independent regulatory
body responsible for protecting consumers and promoting confidence in financial products and services.
It is not part of the Bank. The FPC can consider a range of actions to help strengthen the financial
system.
In some areas it can give directions to the PRA and the FCA. In others it can make recommendations to
them, or to other bodies. If lending is increasing fast, the FPC might, for example, want banks to raise
more capital as an extra buffer in case things turn sour. Or it might think they should hold more liquid
assets or stop using particular financial instruments. In this way it might act as a party pooper, removing
the punchbowl whilst the party is in full swing in order to protect the economy from any financial
hangover that could follow. But there may also be times when it has to get the party going again. The
Bank's job in all this is to deliver stable prices and a stable financial system for the benefit of the
economy as a whole.

The Bank of England prints the banknotes that are used every day in the UK. Sometimes, when needed,
we also need to create extra money to help the economy. It doesn't involve printing more banknotes.
Instead we create new money digitally. This process is called quantitative easing. We use this new
money to buy bonds from the private sector. Buying these bonds stimulates spending and investment,
helping the UK economy.

What is the Financial Policy Committee (FPC)?

Could we start by talking about why we need the Financial Policy Committee?
If the crisis taught us anything, I think it was that there was a gaping hole in the public
policy infrastructure, not just here in the UK but in pretty much every other country on
the planet as well. Now, what was that hole? Well, essentially we had monetary policy
doing its thing, keeping inflation under wraps, and we had the regulatory agencies doing
their thing, which is keeping individual firms safe and sound, and no one really doing the
bit that sits in between, which is checking that the system as a whole is in a safe and
sound state. So this new thing, this FPC, this macroprudential policy is really about
filling that chasm.
Could you tell us what powers the Financial Policy Committee will have?
So the powers that the FPC will have are essentially in a couple of stripes. So we have the
power or the ability to recommend to pretty much anyone a given course of action to
keep risks in check. If that recommendation is to two of the regulatory bodies in the UK,
the Prudential Regulation Authority which sits in the bank or to the Financial Conduct
Authority which sits outside the bank, they are required to comply or explain with that
recommendation. Everyone else there's no such obligation. That's one strand of the FPC's
powers. The other, which is more purposive, it's more statutory in form, is the power to
direct a body, in particular the PRA to adjust, in the first instance, capital, banks' capital
requirements, either in aggregate or on a sectoral basis. Those are the powers we've
sought from Parliament, that Parliament has granted. We could broaden those direction
powers over time if we think we wanted to add to our toolkit.
The Financial Policy Committee has been around for two years as an interim
committee. Could you tell me a bit about what it achieved in those two years?
Well, I think its achievements really fall into two categories. Part of the purpose of
setting up an interim FPC was to prepare the ground for the statutory FPC getting started,
in particular to decide what policy instruments, what powers we might seek and to think
about how those powers might be executed. So we've issued a couple of consultation
papers and a policy statement about how we intend deploying those macroprudential
instruments. That's been one strand of work and the second has really been putting those
instruments to work in tackling the risks and uncertainty in the financial environment. So
what have we done? We've done things like seeking greater transparency and disclosure
from the UK banks to improve market perceptions of their credit worthiness, publishing
leverage ratios and their exposures to the your area. It's been one strand. The second thing
we've done, and this is probably the most important I'd say, is we've adjusted prudential
policy with an explicit eye to supporting the wider economy. This is really what
differentiates macro prudential things from all other realms of regulatory policy. First and
foremost, we're doing what we're doing to support the wider economy, concentrating the
booms, cushioning the busts. We've been in a bust and some of what the FBC has done
has been to seek to cushion that bust. So For example, middle of last year, 2012, we
lowered, we reduced banks' liquidity requirements. Why? To give them room to move
their assets out of liquid assets, things like government securities, and into lending to
support the wider economy. That would not have happened had we not had an FPC. and
that has not happened actually at any point I can find in history, not just in this country
but elsewhere too. That was macroprudential policy making a difference, acting in an
overtly counter cyclical fashion to support the wider economy. We've been asking the
UK banks to replenish their capital with an eye to the same thing. Not with an eye to
squeezing the economy but with an eye to supporting lending and supporting the
economy. Those have been some of the things the FBC has done and my view is that had
we not had the FBC there would not have been done and the economy would have been
worse for it.
How important is clear communications from this committee, and what role do you
play in this Andy?
So this is trickier. It's trickier because there's less awareness among the general public
about what this thing is. You know, what is Macro Prudential? What is the FPC? What is
it trying to do and why? All of that is pretty much uncharted territory. And this really
doubles, trebles the need for us to be as clear and as consistent as we can possibly be in
communicating our messages. We're in regime building mode and part of the process of
building that regime is to have it be better understood by the broader public. And the key
thing, Simon, is this isn't just a conversation between us as Bank of England and the
financial sector, who are the main recipients of our regulatory edicts. This has to be a
conversation with the general public too. One of the key messages, lessons, from our
experience with monetary policy under the MPC is that we're setting policy for the whole
of the UK, for everyone in it. And the self-same thing is true of the FPC. And that means
having an ongoing, close dialogue with everyone, length and breadth of the country,
about what we are doing and why. In terms of my role or the FPC's role as FPC member,
I see it as crucial that I'm out and about explaining up and down the country at the bank's
regional agencies what we are doing and why. If people have criticisms or uncertainties
about that, we need to listen and possibly respond to that. So it's a broadly based,
consistent an ongoing communication strategy that stretches as far as the eye can see.
Could you describe a usual round of meetings and what's it like to be in one of those
meetings?
So to answer maybe the second question first, I mean this is a genuine debate, it's a
genuine discussion. It has to be a genuine debate and genuine discussion because there
are no easy answers. I mean, like with monetary policy, where you enter the room
knowing that its interest rates up, down or sideways, or maybe you're supporting the
money supply in various ways. When you enter the FPC room, all options are open. So
part of the conversation is about, you know, what are the risks out there? And I think
figure that out, which of the many possible interventions, if any, you might want to put in
place. This has to be a debate. Going in with a closed mind would not work in an FPC
setting, could not work in an FPC setting. The way that debate is stirred starts with a
briefing from the staff, some of it pretty pointy-headed analytical stuff, some of it more
touchy-feely, qualitative market intelligence, or supervisory intelligence. One of the huge
pluses of the FPC is that it can bring to the table the views of banking supervisors, the
views of market participants, the views of practitioners, all in one place, bound together
by analysis. We then filter down, winnow down that data, that analysis, into a narrow set
of policy issues, which we discussed at a second meeting of the FPC, and from there we
filter further into a policy recommendation or conclusion that's then put out into the wider
world, hopefully in as clear and coherent a way as possible.
How do you personally prepare yourself for those meetings?
Well, in some ways it's either easier or more difficult for me because I'm doing this pretty
much continuously. So my job is to do financial stability. So in a sense I'm doing FPC
things all of the time. Almost everything across my desk has an FPC angle. So for me the
trick is when I enter the FPC room, how best do I begin the process of filtering that stuff
into a broadly coherent story, at least in my own head, and into a small number of issues
that I think the FPC should do something about. And I'll then stress test my ideas, my
story with other FBC members and as important a part as having my story is listening to
other stories and adapting my narrative accordingly. So very important that we enter that
room with our ears plugged in. We're there to listen as well us to speak. When I think of
the FPC conversations we've had, my mind is often being turned by listening to what
others have had to say. We've come out in perhaps quite different places than some of us
would have went in.
So that's roughly speaking the process. How do you actually reach a decision on policy?
Does everyone always agree?
So the legislation makes clear that where we can make decisions by consensus, we
should. And it turns out that through this iterative process I mentioned, so far we've
managed to reach consensus on all the FPC's recommendations. But let's be absolutely
clear, that has not meant there hasn't been some very animated discussions around the
table about what the right course should be. And even where we have reached consensus,
there are always shades around the consensus view. So the FPC's capital
recommendations in November, and particularly in March of this year, there were a range
of views where that took us sufficiently far. I was of the view that more might have been
done, but was happy with a consensus view as a way to progress. So this is a world away
from the groupthink, you know, that's often portrayed as the way that bank decision-
making is taking place.
This is a very interactive, interpretive process. There are many different bodies
involved here aren't there?
There's the Monetary Policy Committee, the Board of the Prudential Regulation
Authority, the Financial Conduct Authority.
How do these bodies interact? Well, the architecture of the FPC has been designed
explicitly with an eye to ensuring input from and coordination with the other arms of
public policy in the UK, by which I mean the MPC, so we have several members of the
MPC on the FPC. With the PRA, we have the Chief Executive of the PRA on the FPC.
With the FCA, we have the Chief Executive of the FCA on the FPC. We have, to ensure
that groupthink never creeps in, we have four independence from outside of the
regulatory authorities on the FBC. And that's intended to achieve some degree of
understanding, perhaps even cooperation, coordination between these different arms. It
will not and should not result as always thinking the same thing or doing the same thing
but at least by having all that information on the table it increases the chances of us
reaching good outcomes. So the architecture is there overtly with an eye to ensuring
coordination takes place.