Superb account by Andrew Haldane.
He discusses both history and recent changes in BoE post 2008 crisis.
In the light of the financial crisis, there is much to explain. Doing so is not just important for reasons of accountability to the public. Explaining and understanding errors of the past is absolutely essential if policymakers are to learn lessons for the future. To misquote someone none of you have ever heard of, those who forget the errors of the past are doomed to repeat them.
During the course of its 318-year history, the Bank of England has had plenty of crisis experience. And encouragingly, on my reading of history, there is evidence of it having learnt from this experience. In response, radical reform of the Bank’s policymaking framework has been commonplace. There are few better examples than the radical reform of the Bank’s transparency and accountability practices over the past twenty-five years.
Those reforms are continuing to the present day. A wholly new framework for financial stability policy is being put in place in the UK, perhaps the most radical in the Bank’s history. I will discuss that framework later on. This framework can be seen as an evolutionary response to crisis experience, not just this crisis but a great many previous ones. It is impossible to know if this framework will proof us against future crises. But in remembering those errors of the past, it gives us a fighting chance of not repeating them.
So I want to take you on an historical journey charting the Bank of England’s role in financial crises and its response to them. Now, I know what you are thinking. The evolution of financial stability in the UK viewed through the lens of the Bank of England sounds deadly dull. So I am going at least to try to add a touch of colour to the events and personalities of the time.
It has a nice discussion on the famous Barings crisis in 19th century which brought Bagehot’s Lender of Last resort to forefront…