Last week the Bank of England lit the fuse for the biggest reforms in the money markets in a generation. Now it has to stand back and hope they go off.
For the Bank, it is partly a matter of image. Paul Tucker, Bank of England executive director for markets, in a speech this year admitted that outside commentators had asked why the UK had "such a peculiar core money market".
The sterling money markets are wholesale markets used by banks and companies to trade short-term securities such as bills of exchange and certificates of deposit.
They have key significance for the Bank and national monetary policy because they are where it conducts its open market operations to control official interest rates.
The official interest rate is currently 4.75 per cent but, at the shortest end of the money markets - the overnight market - interest rates can swing wildly, driving away potential new entrants.
The worst excesses of volatility have diminished in recent years due to earlier reforms but liquidity is still a problem.
Early last century there were a dozen or more discount houses in London making markets in short-term money but by the 1980s they were a spent force. Now just a handful of clearing banks dominate.
The Bank itself feels responsible.
Effectively a large single commercial bank that is a counterparty to the Bank's open market operations can take the Bank's money and use it to influence the overnight interest rate in the money markets by trading at a different rate from the Bank's official rate.
In the US and the eurozone overnight interest rates are much smoother from month to month between meetings of their interest-rate setting committees. No one bank has enough influence to push them around.
The fine print of the plans was published last week and the Bank has set a consultation deadline of January 7. A core aspect is that banks will be expected to hold Bank of England reserves, which would earn interest for the first time in the Bank's 300-year history. The target level of these reserves, varying from bank to bank, would be set as an average over a month to help smooth the market.
The 12 settlement banks, which at the moment hold only minimal accounts, would hold much bigger amounts - possibly 100 times as much. Each would be set a target average, remunerated at the official rate. Officially this is voluntary but in practice none is expected to opt out.
In addition, standing lending and deposit facilities would be introduced to help stabilise the overnight rate - a corridor of 0.25 per cent either side of the official rate. And open market operations, which at the moment take place daily with a two-week maturity, would take place once a week and have a one-week maturity.
Official comment has been positive. The British Bankers' Association says it is "broadly happy with what the Bank is proposing". At Barclays Capital, the investment banking arm of settlement bank Barclays, Anthony O'Brien, UK rate strategist, says: "The potential increase in depth of liquidity and transparency in the market should be welcomed and may provide profitable trading opportunities."
The Bank also hopes the 100 or so mid-sized UK banks and building societies will join its reserve averaging system. It has not said what response it has had so far.
More ambitiously, it hopes to swell the ranks of settlement banks. Being a settlement bank involves responsibilities but not necessarily any additional commercial benefit. Some in the industry have serious reservations.
Nor have any foreign banks expressed a desire to become settlement banks. The Bond Market Association, a trade body for international banks, said this year: "Based on discussions with association members, most firms appear to have no interest in becoming settlement banks."
On the other hand, volatility in the overnight market has decreased since the announcement of the reforms.
The Bank thinks this should help kick-start the overnight interest-rate swap market, which has lagged behind its equivalent in the eurozone. /www.news.ft.com/