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Bank of England operational independence: to what extent has the Bank fallen victim to groupthink?

Monday 15 May 2023

At 3pm on Tuesday 16 May the House of Lords Economic Affairs Committee will be taking evidence from:

  • Christina Skinner, Professor of Legal Studies and Business Ethics, University of Pennsylvania, and former Bank of England legal counsel
  • Professor Timothy Congdon, Chairman of the Institute of International Monetary Research, University of Buckingham.

Topics the committee is likely to cover in this session include:

  • Whether central banks have fallen victim to groupthink and/or poor models.
  • The main advantages and disadvantages to the Bank of operational independence.
  • Whether expanded remits ask too much of the Bank and risk its politicisation.
  • Risks associated with a central bank’s role as both a micro and macroprudential supervisory authority.
  • Whether Quantitative Easing (QE) and the size of the balance sheet has compromised the Bank of England’s independence and credibility in the fight against inflation.
  • The balance between accountability and operational independence.
  • Whether the existing regulatory frameworks across the globe can identify nascent systematic risks.

The meeting will be held in Committee Room 3 of the House of Lords. It will also be streamed live on Parliament TV.

More about this inquiry 

2023 marks the 25th anniversary of the Bank of England Act 1998. This Act gave the Bank of England its independence and reformed the structure, responsibilities and functions of the Bank.

The Economic Affairs Committee has launched an inquiry to examine how operational independence is working. It will focus on the Bank’s role and remit; whether the governance structures of the Bank are appropriate; and how the Bank is being held accountable for its actions.

It will not look at individual policy decisions that the Bank has taken.

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