Mr. Matthew Elderfield:

The communication gaps were probably even more exacerbated within regulation and the Central Bank. We have gateways to talk to the Department of Finance and we do. Frankly, my immediate priority, and we have made improvement, was how we work within the Central Bank. I shall list a couple of things. I meet all of my directors every morning or most days of the week so we are all in touch with each other. We have an escalation system. For example, a hot supervisory issue can be escalated to our supervisory risk committee where we can track its progress. That committee deals with whistleblowing once a quarter. It means that we have a line of sight and things cannot just crop up and then fade away. There is an audit trail.

We have a probability risk and impact system, PRISM, that allows us to systematically examine issues. We take our universe of firms, divide them up and decide which will get a very thorough risk assessment. Where that is the case, then the firm has its assessment on site. Then we have a risk governance panel and a challenge process. Before we communicate with the firm we bring people together, whether it is a bank or our financial stability colleague from the Central Bank who will also be present and we join up with the economists who can see the bigger picture.