ContextSpeech at the farewell symposium for Klaas Knot in Amsterdam; the Bank of England protects monetary and financial stability and faces global risks to the financial system.
Why it mattersThe Bank of England Governor reflects on what the 2008 crisis taught about uncertainty over bank solvency.
Problems raised
The 2008 crisis was worsened by hard-to-value bank assets.
Uncertainty about bank solvency spreads stress.
Risk-taking must be managed.
Solutions proposed
Accept that banks must take risks, but manage them.
