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There needs to be greater coordination between the Bank of England and the U.K. Treasury to ensure an effective response to the next economic downturn, according the campaign group Positive Money.
In a report to be published late Tuesday, the group calls for changes to the relationship between the two bodies, including allowing the Monetary Policy Committee to write a letter to the Chancellor outlining its expectations or assumptions over fiscal policy when interest rates are at the effective lower bound -- a level policy makers have identified as just above zero.
The report also recommends:
- The establishment of a new credit policy unit split across the BOE, Treasury and Department for Business, Energy and Industrial Strategy, to help the central bank encourage lending and support the government's economic strategy
- An independent review into monetary policy strategies following a crisis
- Changing the job descriptions for MPC positions to attract a more diverse range of candidates from outside of London's finance industry, and opening the appointment process to wider scrutiny
- Make the shortlist of applicants for any new governor public and, for other roles, allow the Treasury Committee to see a shortlist of candidates and provide feedback on diversity
To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Andrew Atkinson
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