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The first thing we have to do is be absolutely straight with the people of the United Kingdom in terms of the potential risks around the process of leaving the European Union. So we've been up front in our most recent reports to say, look there's some big risks in the derivative markets.
There's issues and insurances issues with data, and then there's general issues in terms of what an economic shock could do in a worst case scenario, but we have to plan for worst case scenario what economic shock could do to the health of the banks, business, societies, insurance companies.
We are in exceptional circumstances, as per our remit, which means we should be giving a bit more consideration to supporting the economy. And we can take longer to bring inflation back to target, which is what we've been doing within limits, within our tolerance.
And so we need to explain that and get across to the general public that we're going to give the support we can to the economy whatever happens, but ultimately guided by that inflation target. And then to those who watch closely in the markets, to try to get across a little more clearly that this could have consequences depending on what evolves.
Consequences for interest rates could go either direction, because it could be inflationary, could be disinflationary. Depending on what deal we strike, depending on what transition or horizon there is, and we don't know where that's going to end up.
The one thing that has struck me from the day I arrived here is just how much anger there is across the country at what happened, and how long it naturally takes once you've had an experience like the financial crisis in the UK to rebuild the confidence in the system. And by that respect, I mean the financial system.
So we have to get out. We have to do the right things, but we have to get out and explain the progress that's being made. In setting policy, we need to make sure that inflation obviously is low, stable, predictable across the country, but finance the banks, building societies, insurance companies in this country are rock solid, that people can rely on them.
And very importantly that as time to time will happen, if they do something wrong, if an individual institution makes a mistake, that it's that institutions shareholders, and the senior management, and other creditors that bears the responsibility, not the wider economy.
We are much, much farther down the road both in terms of the capital structure of these institutions. So there's a lot more bail-inable debt in the UK. It's not all that we need, but there's a lot more there. And remember as well, we're making tremendous progress.
The institutions are making tremendous progress on ring fencing. The bit of the banking system that will lend to households, lend to businesses, and that ring fencing, which is consuming a lot of time and let's face it, a lot of money in order to make it happen, is going to put UK financial institutions in a position where they are resolvable.
We're not quite yet at the point where a large complex financial institution could be seamlessly resolved. We're getting closer and we certainly will have, if something were to happen, a lot more options of what to do and a lot more of the burden would be put on private creditors.