Jon Cunliffe: Housing tools revisited

Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at the Bank of Portugal, Lisbon, 3 July 2019.

Central bank speech  | 
11 July 2019
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I am very pleased today to be in Lisbon. The Bank of England has a long history. But we are relative teenagers compared to the Alian├ža Inglesa or Anglo-Portuguese alliance dating back to 1373 - that is, I think, the oldest alliance still in force in the world.

We do however have a long history for a central bank. We were over 150 years old by the time the

Banco de Portugal was founded in 1846.

But a long history is not always a good thing.

By 1846 the UK had on average experienced at least one financial crisis per decade since the Bank was founded in 1694. And in 1846 the end of a speculative boom in railway investment coupled with a poor harvest was about to precipitate another - amplified by currency laws introduced in 1844 that restricted the Bank's ability to provide liquidity in a crisis.

Recent work at the Bank of England on the Bank's response to the crisis that unfolded in 1847 suggests that although we appear to have rationed credit we were beginning to edge towards assuming a more unequivocal lender of last resort role - though it took a few more crises before that lesson was fully learned.

As our financial systems have evolved, we have a long history of dealing with financial crises and of learning, sometimes slowly and painfully, their lessons.