Alex Brazier: Stability, agility, opportunity

Speech by Mr Alex Brazier, Executive Director for Financial Stability Strategy and Risk of the Bank of England, at the Edinburgh Futures Institute, University of Edinburgh, Edinburgh, 2 September 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

More than a decade on, it would not be surprising if memories of the financial crisis had begun to fade.

But the costs of that crisis have not.

The level of output is still 17% below the path it was following before the crisis struck. So deep was the recession and prolonged was the recovery that each person in the UK is, on average, £20,000 worse off as a result.

The huge costs of financial crises explain why Parliament decided in the aftermath to tie itself to the mast. It recognised that a day might come when there could be temptation to loosen up regulation; to go for quick wins at the risk of greater costs down the road.

It knew that temptation - if it ever came - must be resisted. So it delegated - in law - the job of maintaining financial stability to the Bank of England.

The job is to promote a financial system that can serve households and businesses not just in the good times, but also in the bad.