On 20 June 2019, the Governor of the Bank of England (Bank), Mark Carney, delivered a speech outlined the findings of Huw van Steenis’ report, the ‘Future of Finance Review on the Outlook for the UK Financial System’ (the Report), and set out the Bank’s Response to the Report (the Response). The speech was delivered by the Governor at the Mansion House Bankers’ and Merchant’s Dinner.
The Governor described how the new economy is driven by changes in technology, demographics and the environment. Reflecting the findings of the Report, the Governor announced that “this new economy requires a new finance”. This “New Finance” must serve the digital economy, be more cost effective and more inclusive as well as support the transition to a sustainable economy which balances innovation with resilience. He noted that the Bank’s strategy is to enable innovation and to empower competition, while ensuring monetary and financial stability. The Governor stated that this would be done by utilising the Bank’s hard infrastructure (such as access to the Bank’s balance sheet and access to the Bank’s Real-Time Gross Settlement system) and soft infrastructure (such as rules, regulations and standards).
Carney summarised the actions that the Bank will take to enable the new economy; to ensure the resilience of the financial system; and to support the UK’s transition to a carbon-neutral economy. These actions are reflected in the Bank’s Response that sets out the five priority areas for action by the Bank, namely:
Priority 1: Support a more resilient, innovative and competitive payments system for UK households and businesses.
Priority 2: Help create an open platform to boost access to finance for small businesses and choice for households.
Priority 3: Support an orderly transition to a carbon-neutral economy.
Priority 4: Deliver a world-class Regtech and data strategy.
Priority 5: Facilitate greater resilience and adoption of the cloud and other new technologies.
The Bank announced its plans to consult on opening access to its balance sheet to new payment providers and to launch a review to explore the transformation of the hosting and use of regulatory data over the next decade.
The Governor closed his speech by acknowledging that the ultimate test of the “New Finance” would be whether it helps to deliver a more sustainable, inclusive and prosperous future for the UK economy’s households and entrepreneurs.