Financial Stability And Growth: The Financial Policy Committee’s Mandate And The Question Of Balance − Speech By Jonathan Hall, Bank Of England, External Member Of The Financial Policy Committee, Given At The Confederation Of British Industry

Jon introduces the FPC’s mandate in the context of the balance between efficiency and resilience. Jon then shows that executing that mandate involves optimising a second, distinct balance between private sector resilience and public sector backstops. Through this approach, financial stability policy supports long-term growth.

Jonathan Hall

External member of the Financial Policy Committee

Speech

I am very happy to be with you at the CBI today to discuss the reasons for, and the implications of, the FPCs mandate.

By the end of our conversation, I hope I will leave you with the following impressions:

The FPC’s mandate appropriately balances efficiency and resilience, in support of long-term growth.
A natural consequence of this mandate is that an extreme shock may overwhelm private financial sector resilience.
In such cases additional "backstop" policy tools are necessary to protect the system. Intervention for financial stability reasons is a feature, not a bug, of socially optimal policy.
Executing on our mandate involves optimising the balance between frontline private sector resilience and public sector backstops.

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