Andrew Bailey: Reinventing the wheel (with more automation)

Speech by Mr Andrew Bailey, Governor of the Bank of England, at Brookings Institution, Virtual Event, 3 September 2020.

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

Introduction

Even central bankers can sometimes be accused of overusing language. So, the world is always more uncertain than ever - except that at the moment it really is. And, innovation is all around us except in the productivity numbers. One area where innovation really is around is the world of payments, the focus of my remarks today.

Innovation is a good thing. As authorities and regulators it is not in our interest - the broad public interest - to stop innovation. Moreover, when supported by clear standards and expectations, innovation can support the pursuit of public interest objectives such as greater inclusivity and network resilience. Making such standards clear early is much preferred to attempting to claw back the ground later, and particularly if that comes after things go wrong.

This is the backdrop to innovation in payments, particularly in the area of so-called digital currencies, developed to offer new forms of "money".