My name is Andrew Grice and I am a Senior Manager, Customer Banking Division at the Bank of England. My job includes running the gold vaults here at the Bank where over 400,000 bars worth around £160billion are stored for our customers.
Q) Did people who worked in the Bank of England lose their jobs in 2008?
From entertaining_tangerine at St Gregory's Catholic Primary School
A) The financial crisis didn’t cause anyone at the Bank of England to lose their jobs. In fact, following the crisis the Bank took on lots of new responsibilities which before the crisis were carried out by other organisations. For example, following the crisis a new part of the Bank of England was created, called the Prudential Regulation Authority. It is responsible for making sure that banks follow the new rules which have been drawn up to keep them safe.
As a result of this expansion, the number of people that work here has actually increased considerably. There are now more than 4,000 people employed at the Bank. Many of us work at the Bank’s headquarters in Threadneedle Street in London, but we also have staff at based across the United Kingdom, including in our network of Agencies which are the Bank’s ‘eyes and ears’ in every part of the country.
Q) How secure is the banking system? What if somebody had happened to hack in unpredictably, would this result in residents of England losing their money and what would happen to our economy?
From openminded_skill at Elaine Primary School
A) Banks and building societies are some of the safest organisations in the world. The Bank of England tries to make sure that all the banks which make payments have secure computer systems and that if there are faults these are fixed quickly. Sometimes this can mean people cannot make payments from their bank account, so we ask the banks where there are faults why this has happened and what they will do to stop this from happening again.
The Bank of England makes sure the “payment systems” – the connections and “pipes” which allow money to be transferred is are also secure. One way of doing this is to “test” the system to see if someone is able to “hack” into it (called a “Penetration test”). The Bank has devised a framework to ensure systems remain available - this is called CBEST and is part of something called “financial sector continuity.” You can find out more about this at https://www.bankofengland.co.uk/financial-stability/financial-sector-continuity
The Bank of England tries to make sure that banks have sufficient money available (called “capital”) to meet unexpected losses and are able to carry on providing banking services. We ensure that people’s money is guaranteed through something called the Financial Services Compensation Scheme, even if it is stolen (up to a limit of £85,000).
Hi, I'm Sam Woods, Deputy Governor for Prudential Regulation. I’m the guy in the video! I am charge of the part of the Bank of England that regulates banks, building societies and insurance companies.
Q) Could the financial crisis happen again? If so what steps could the Government take to prevent it?
From optimistic_moon at Notley Green Primary School
A) We certainly hope not! But it would be a brave person who says we will never have another crisis that affects the economy. There have been many crises throughout history, some dating back hundreds of years. So the chances are there will be another one at some point in the future. But it’s unlikely to look exactly the same as the crisis of 2008. That is partly because the Bank of England and other organisations like us around the world have taken lots of steps to address some of the key causes.
For example, we have set new rules for the banks which mean they have to put more money aside so they are able to stay in business should things start to go wrong. We’ve made lots of other changes too, including new rules on bankers’ pay. You can learn more about these changes on our Knowledge Bank website.
We think that, overall, the system is now safer, simpler and fairer than it was before. But one of the jobs of the committee that I sit on is to look out for what might cause the next crisis. The problems might start in the banking sector again or be caused by something else like a cyberattack or a big computer failure.
It’s important to remember that the Bank of England, where I work, has different jobs to the government. Although the Bank is owned by the government, we operate independently of each other. But we both play an important role in the economy.
During the financial crisis the government took over some of the banks that got into trouble to stop them collapsing. One of the aims of the changes we have made since the crisis is to avoid the government having to do that again, because it was taxpayers who paid the price when that happened.