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- Title
Remarks on 'Making monetary policy by committee'.
- Abstract
In these remarks, Paul Tucker, Executive Director for Markets and Monetary Policy Committee (MPC) member, notes that social, political and historic factors affect the choice of monetary policy decision-making structures in different countries. In the United Kingdom, the MPC sets Bank Rate on a one member, one vote basis, and so compared with other central banks, is at the `individualistic' end of the spectrum. But there are centripetat forces at work too: MPC members are incentivised to listen to one another, learn and persuade by careful analysis; and some MPC communications, such as the quarterly Inflation Report, are based on a shared understanding of the economy. The more collective Committee statements provide a backdrop for individual members' statements, and help to reduce the risk, aired by some commentators, of `cacophony' in communications impeding the effectiveness of policy. As for the current conjuncture, he notes that because of the financial market turmoil, the short-term risk-free rate of interest may not be a summary statistic of monetary conditions in the usual way. Consequently it is necessary to undertake a richer analysis of monetary and credit conditions.
- Subjects
UNITED Kingdom; TUCKER, Paul; BANK of England. Monetary Policy Committee; MONETARY policy; ECONOMIC policy; BANKING industry; BANK of England
- Publication
Bank of England Quarterly Bulletin, 2008, Vol 48, Issue 3, p347
- ISSN
0005-5166
- Publication type
Article