David Ramsden: Getting the balance right - ensuring the Bank's balance sheet can support financial stability

Speech by Sir David Ramsden, Deputy Governor for Markets and Banking of the Bank of England, at the Official Monetary and Financial Institutions Forum, London, 9 December 2024.

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

Good afternoon, thank you to OMFIF for the invitation to speak to you today, it's a pleasure to be here.

The end of the year is always a natural time for reflection. This time last year I gave a speech on banking resolution, looking back over a year influenced by the failures of Silicon Valley Bank and Credit Suisse. And a year before that I reflected on the significant shocks that had struck the UK economy in 2022.

So, at the end of 2024, I'd like to take stock again, surveying the landscape of the UK's financial system. And I will do so from my perspective as the Bank's Deputy Governor with executive responsibilities for our balance sheet operations and as a member of the Bank's Financial Policy Committee (FPC) and Prudential Regulation Committee (PRC). Approaching financial stability risks from that vantage point allows me to think through how we can get the balance right in terms of monitoring and acting on risks first at the firm level, then at the system-wide level, and then in both those pursuits considering how the Bank's balance sheet can be best put to use in maintaining financial stability.

We should pause on that final point for a moment though. What do we mean by 'maintaining financial stability'?

As my colleague, Sarah Breeden, set out in September financial stability is a concept that can be hard to pin down. In its simplest form we can describe it as the absence of instability, but more fully it means the financial system provides vital services to households and businesses reliably in all states of the world, even when shocks hit, which, in turn, lay the foundations for sustainable growth.