Hoover Daily Report

BOE Looks to Former Fed Official for Transcript Guidance

via Real Time Economics (Wall Street Journal)
Wednesday, April 30, 2014

The Bank of England said Wednesday it hired a former Federal Reserve governor to review whether it should publish transcripts of policy makers’ meetings.

Kevin Warsh, who sat on the Fed’s board of governors between 2006 and 2011, will report back by the end of the year, the U.K. central bank said in a statement.

The BOE publishes minutes of its Monetary Policy Committee’s discussions about policy and the economy every month but it doesn’t publish a verbatim transcript. The Fed makes transcripts available of Federal Open Market Committee meetings after five years. The European Central Bank has said it will publish transcripts of its governing council meetings after 30 years have elapsed.

Lawmakers on the treasury committee of the U.K. parliament were a little taken aback in March when BOE officials told them they couldn’t publish transcripts of past meetings because they erase the audio recording after the minutes are published. The treasury committee politely suggested they reconsider and BOE Gov. Mark Carney agreed to review the practice, which predates his arrival at the BOE in July.

Mr. Warsh’s review will examine the costs and benefits of keeping the recordings of MPC meetings and publishing a transcript. It will also consider the case for doing the same for meetings of the BOE’s Financial Policy Committee, which monitors the financial system, and the board of the Prudential Regulation Authority, the BOE unit in charge of bank supervision.

BOE officials argue that keeping a verbatim record might hamper the “free-flowing” nature of their discussions. They insist the minutes are checked and rechecked by all members of the committee to ensure they accurately reflect what took place.

Mr. Warsh, who teaches at Stanford University, will look at whether any changes need to be made to the MPC’s procedures, the BOE said.

“It’s a privilege to serve the Bank of England in this capacity,” Mr. Warsh said in a statement. “The objective is to evaluate if changes in the practice of conducting monetary policy would serve the long-term interests of the U.K. economy.”