Tag: Financial Policy Committee

Chris Giles Paul Fisher finds his voice

March 13, 2012 2:25 pm by Chris Giles

I always enjoy reading speeches by Paul Fisher, executive director for markets at the Bank of England. They clearly set out his views and appear to come straight from the central propaganda unit of the BoE.  If you want to know the official line on the new Financial Policy Committee or macroprudential policy, read Paul’s speech from last night, for example.

The speech blames the lack of powers available to the BoE for officials’ inability to control the crisis, but reassures us that the new FPC is now seeing its recommendations implemented.

The logic of the speech is that the BoE’s voice could not work before the crisis so the BoE cannot be blamed. Yet voice is succeeding now, so the BoE must get the credit.

What is remarkable is that Mr Fischer seems to forget that the powers available to the BoE now are precisely the same as those available to the BoE in the crisis. New powers will come only when legislation is passed and certainly not until 2013.

Read the speech to feel the full righteousness of the BoE official line.  Or you can read the best quotes below.

Continue reading: “Paul Fisher finds his voice”

Tags: , ,
Posted in Bank of England |

Claire Jones A new monetary policy regime for the Bank?

February 16, 2012 3:07 pm by Claire Jones

Sir Mervyn King has in the past been of the sort of central banker that has, at every opportunity, extolled the virtues of inflation targeting.

So comments at yesterday’s Inflation Report press conference, where the governor conceded that the Bank of England’s monetary policy framework has its deficiencies, were something of a surprise. Here’s what he said:

“I do think the experience of the last four to five years has raised some question marks about what inflation targeting can hope to achieve and whether it’s sufficient. I think our feeling now is, on its own, it’s not sufficient, it did not prevent the build up of a large degree of financial instability. And there is I think a debate to be had about whether other instruments are the right way to deal with that, through our Financial Policy Committee, or whether monetary policy should take other considerations into account.”

Could this be the beginning of the end for the Bank of England’s inflation target, at least in its current guise?

It’s far too early to say. Besides, with the governor due to depart mid-way through next year, whether or not the Bank alters its monetary policy framework will largely depend on the views of Sir Mervyn’s successor.

However, his calls for a debate could prove significant.

Continue reading: “A new monetary policy regime for the Bank?”

Tags: , , , , , ,
Posted in Bank of Canada, Bank of England, Federal Reserve |

Claire Jones More support for breaking link between RoE and pay

November 1, 2011 3:37 pm by Claire Jones

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.

Continue reading: “More support for breaking link between RoE and pay”

Tags: , , ,
Posted in Bank of England |

Claire Jones The FPC’s split

October 3, 2011 3:58 pm by Claire Jones

It is not only lenders that are calling for less stringent regulatory requirements.

The record of the Bank of England’s Financial Policy Committee meeting show its membership – made up of the same senior officials from the Bank and the Financial Services Authority that help set the regulatory agenda – was split over whether to lower capital and liquidity ratios.

This from the record:

The balance of opinion on the Committee was that it would be inappropriate in current circumstances for banks to reduce capital and liquidity ratios.

To be sure, none were siding with the banks’ view that Basel III is too tough. But some argued that reducing requirements for the time being – say from now until the economy recovers – may prop up growth by encouraging banks to lend.

This goes a lot further than the FPC’s statement, published last week, which said only that – if financial conditions worsen – it was “natural” that capital and liquidity buffers would be run down.

Unlike with the Monetary Policy Committee, we are in the dark about how individual FPC members vote. So it is impossible to tell how close, or otherwise, it was to recommending a lowering of capital and liquidity ratios.

But those reluctant to act were probably right. 

Continue reading: “The FPC’s split”

Tags: ,
Posted in Bank of England |

Claire Jones Dividends and capital buffers

September 29, 2011 7:16 pm by Claire Jones

Regulators on both sides of the Atlantic are calling on banks to strengthen their capital buffers by lowering dividends.

Britain’s Financial Policy Committee yesterday suggested as much. Today, Eric Rosengren, the president of the Federal Reserve Bank of Boston, was more explicit.

Mr Rosengren’s approach is also more interventionist.

Continue reading: “Dividends and capital buffers”

Tags: , ,
Posted in Bank of England, Federal Reserve |

Claire Jones A mixed message from the FPC

September 28, 2011 3:49 pm by Claire Jones

The Bank of England’s Financial Policy Committee statement, out today, has left a lot of people scratching their heads.

The first of two recommendations calls on banks to “take any opportunity they had to strengthen their levels of capital and liquidity so as to increase their capacity to absorb flexibly any future shocks, without constraining lending to the wider economy”. The second warns that “some actions taken to raise capital or liquidity ratios could potentially worsen the feedback loop between the financial sector and the wider economy, and so should be avoided”.

At first glance, the recommendations appear contradictory. They are not. But they are conflicting.  

Continue reading: “A mixed message from the FPC”

Tags: , ,
Posted in Bank of England |

Claire Jones BoE data: do write-offs reflect real estate woes?

August 30, 2011 3:35 pm by Claire Jones

Do today’s Bankstats data go some way to explaining why the Financial Policy Committee is so concerned about the commercial real estate sector?

The Bank of England data show that, at £2.94bn, write-offs for bank and building society loans to non-financial corporations in the three months to June were at their highest level since the Bank began collecting the data in 1993. The figure jumped from £1.08bn in the first quarter. The previous high was £2.49bn, seen in the final three months of 2009.

How much of this is accounted for by commercial real estate loans?

Continue reading: “BoE data: do write-offs reflect real estate woes?”

Tags: ,
Posted in Bank of England |

Money Supply

Central bank blog

About this blog Blog guide
Opinions on market-moving economics and central banks around the world.


To comment, please register for free with FT.com. Read our policy on comments and include your name when submitting a comment.

All posts are published in UK time.

Contact claire.jones@ft.com about the Money Supply blog.

See the full list of FT blogs.

Editor’s choice

David Daokui Li

My lessons from life as a Chinese central banker

Euro in crisis

Fears of a Greek exit mount

The Money Supply team

Chris Giles Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS

Ralph Atkins, Frankfurt bureau chief, has been writing about European economics and politics for the Financial Times for more than 20 years following an economics degree from Cambridge. He has been watching the European Central Bank and eurozone economies since 2004. He has previously worked in London, Bonn, Berlin, Jerusalem and Brussels. RSS

Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS

Claire Jones is Money Supply economics team writer, based in London. Before joining the Financial Times, she was the editor of the Central Banking journal and CentralBanking.com. Claire studied philosophy and economics at the London School of Economics. RSS

James Politi is US economics and trade correspondent for the Financial Times, based in Washington DC. He joined the Washington bureau in January 2008 following four and a half years as US deals correspondent covering M&A and private equity. James Politi joined the FT in London in 2000 with an MSc at the London School of Economics, and undergraduate degrees from Georgetown University and the University of Florence. RSS

Archive

« AprMay 2012
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
28293031