The Bank of England today published an independent report by former Federal Reserve Board Governor Kevin Warsh, following his review of the Monetary Policy Committee’s (MPC) transparency practices and procedures.
The Bank also announced a series of significant transparency, accountability and governance enhancements designed to put the Bank at the forefront of international best practice and enhance its ability to fulfil its mission to promote the good of the people of the United Kingdom by maintaining monetary and financial stability.
Governor Warsh recommended that the Bank adopt reforms in service to what he called the “Big 4” objectives: making sound policy decisions; communicating judgments effectively; ensuring accountability for its actions; and creating a fair and accurate historical record.
The MPC welcomed Governor Warsh’s report, accepted his recommendations, and announced the following changes to its practices:
- publication of both the minutes of its policy meetings and (in the relevant months) the Inflation Report at the same time as its policy decisions, starting in August 2015;
- publication of written transcripts of the meetings at which monetary policy is decided, and related staff policy briefing material, with an 8-year lag, as of the March 2015 policy meeting;
- alteration of its 2016 meeting schedule to provide scope to move to eight policy meetings a year;
- plan to hold four joint meetings between the Monetary and Financial Policy Committees in 2016.
Commenting on the Bank of England’s announcement of a series of governance enhancements, Yolanda Rugg, Chief Executive of the Hertfordshire Chamber of Commerce said:
“Businesses will support attempts by the Bank of England to deliver greater transparency and improve accountability. However, with much of business’ uncertainty on interest rates driven by comments made by MPC members outside of official meetings, and often providing conflicting views on rates, we question whether the changes will achieve their intended aim.”