Wednesday, 11 July 2012

Central Bank

What is the Bank of England for?

Monetary Policy.
The bank sets interest rates to keep inflation low to preserve the value of 'our' money.

Financial Stability.
The bank contributes to protecting and enhancing the stability of the financial system.

Two days ago, and yes it has taken me a while to let Paul Tucker's evidence at the treasury select committee sink in, it was clear as he was being questioned that the bank did NOT see itself as either a regulator or and enforcer of bank laws, and yet the MPs seem to be under the impression that the bank should be doing more.

Well, if that is true, then why don't they [the politicians] make the bank more independent, give it more responsibility and hand over more powers so that the bank can provide the service which the politicians seem to have implied is expected.

I feel as though the MPs appear to be asking a man with his hands tied behind his back, why he hasn't caught any fish today?

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