In comments released today, Andy Haldane, the Bank of England’s executive director for financial stability, has called for “a radical rethink” of banks’ accounting rules, the reason being that the rules as they stand have done much to destabilise the financial system.
To date, accounting rules for banks have bent with the financial stability wind in ways which have amplified investor and regulatory uncertainty. To lean against the prevailing wind, accounting rules for banks may need to recognise more explicitly their differences.
As Mr Haldane notes, this is a debate that over the past century has been shaped by financial crises. Read more
Hello and welcome to today’s live blog on the Treasury Select Committee’s hearing for the Bank of England’s Financial Stability Report.
The governor will be giving evidence, as will executive director for financial stability Andy Haldane, and external Financial Policy Committee members Michael Cohrs and Robert Jenkins.
This post should update automatically every few minutes, although it may take longer on a mobile device. All times are London time.
13.18 The live blog is now closed.
13.17 Here are the key takeaways from today’s hearing:
- The Bank is clearly nonplussed with the Treasury Committee’s call for a strong supervisory board. Sir Mervyn
Andy Haldane, the Bank of England’s executive director for financial stability, writes in the New Scientist today on what finance can learn from meteorology.
Mr Haldane has been one of the leading advocates of the view that economics should borrow from science in order to better understand the nature of systemic risk.
In the New Scientist article, he writes that creating a map of the entire financial network would allow regulators to issue the equivalent of a weather warning. Read more
Andy Haldane, the Bank of England’s executive director for financial stability, is considered one of the most original thinkers in any central bank.
Mr Haldane, to his credit, not only picks holes in existing practices, but also suggests possible fixes.
His call for regulators to lower capital and liquidity buffers has, however, largely fallen on deaf ears, with the majority of the interim Financial Policy Committee against it. But another of his ideas appears to be more popular. Read more
The only thing we have to fear is fear itself.
That’s according to Andy Haldane, the executive director of financial stability at the Bank of England, who said in August markets were over-pessimistic as a result of “psychological scarring” from the events of recent years.
It would seem that what Mr Haldane labelled the “fear factor” has also afflicted his boss, Sir Mervyn King, who yesterday claimed “this is the most serious financial crisis we’ve seen at least since the 1930s, if not ever.” Read more