 In the old days, we would have thought this would have had thousands of people and it would have been incredibly important meeting But as we're about to take a decision which could affect our economy by between six or nine percent GDP a year It feels as though this is a minor consideration perhaps compared to those but indeed it is an extremely important decision the relationship between for example setting the interest rate on all of our mortgages and all the other important macroeconomic and Day-to-day decisions which the Bank of England makes decisions on I would really like to thank Fran who is a wonderful Leader in this field and the work of positive money, which is a fantastic member based organization and Which is a really good resource for members of Parliament who are not necessarily experts in the economy But who take an interest in how the economy affects the lives of their constituents So I would really like to extend a thank also thanks also to our brilliant report writer who is going to speak to the report briefly and called seeking legitimacy, which is a great title and I'm looking forward very much to digesting all of this in between votes this evening With no further ado, I'm going to pass over to Fran who's going to talk about how we're going to proceed today. Thank you Thanks all for being here Quite cute to get in so I'm Fran Boyd. I'm an effective director of positive money and today we're launching the report seeking legitimacy in new settlement with the Bank of England We already had some good coverage in the press And obviously we feel like this is a really important topic and quite a tiny report Seeing was we're on the verge of appointing a new governor of the Bank of England who will serve an eight-year term And already in the decade since the crash the economy and what the Bank of England does looks quite different and in the next Eight years to a decade. We've got obviously quite a lot of challenges coming our way Whether that's climate change inequality and how we make the UK economy better serve people and domestic economy so And what's happened since the crash is obviously the kind of failure of central banks to predict the crisis resulted in them Grappling with a kind of legitimacy crisis, so the kind of orthodox model of central banks began to disappear somewhat and As well as that central banks were given new responsibilities an important one, which we would applaud is financial stability And alongside that they're given new tools some of which are kind of complex and to a degree shrouded in confidentiality And at the same time and actually policy was given new tools as well Including what's to be using Which obviously had significant distribution of facts and there was some controversy over that and some doubts in it It's effectiveness So what we're trying to do with seeking legitimacy isn't Isn't simply trying to kind of talk about the policy tools Which that for those of you that have followed positive money for the last Seven years will know we talk a lot about and how we could use new tools to Stimulate the economy. We're looking at the institutional arrangement Something we've been advocating for a long time the need for increased monetary and fiscal policy cooperation And so here we try and set out some specific ways to do that And kind of start the conversation on implementation because we do see that as being huge barrier to getting this Conversation moving, you know, if you go to the Bank of England, they'll say, you know, that's the Treasury as well It's the Treasury that's in the Bank of England role. And now we've got the industrial Strategy in there as well. So we think that actually these powerful Micro-economic institutions need to all be working together for a direction of the economy So we've got a fantastic line up of speakers Rob is our is the lead author for a quarry of seeking legitimacy He was an economist that was the money we sadly lost in earlier this year. He works now as an analyst at the climate policy initiative We have said this cable So this leader of the Liberal Democrats between 2017 and earlier this year He was the secretary of state for business innovation. It's built five years during the coalition government During which he created the world's first ever green investment bank and he's currently the Liberal Democrats spokesperson for health and social care We have Ian Blackford the leader of the SNP's Westminster group He served as MP to Ross, Skye and Locke about in 2015 and has repeatedly questioned the effectiveness and side-effects of Crackling and Quantity Leasing Programme and to clear the first ever commons debates on the topic in 2016 We're very pleased about that, so thanks for doing that We have Robert Skidelsky a professor emeritus of political economy at Warwick University And his book Money in Government, A Challenge to Mainstream Economics was published earlier this year It was a very good book and why we brought him onto the panel He was a former conservative treasury spokesperson and he now sits as a cross venture in the House of Lords And we're also expecting Clyde Lewis who's the MP for Norwich South since 2015 to join us And he currently serves as Labour's shadow treasury minister for sustainable economics For entering politics he worked as a journalist for BBC Reporter And we've had apologies from Ross Alden who is a conservative peer in his life And unfortunately due to the significant activity in Westminster she wasn't able to join us So we're not quite as full cross party as we hoped but we're doing quite well I think So we're going to kick off with Rob, we're going to hear from all the panellists And then we'd love you to be part of this discussion as well as we know there's a lot of thinking in the room Thank you You'll be in charge soon I'm going to have to say in advance I've got quite some throat so you're going to have to give me that Thanks very much everyone for being here for such an early start I just want to outline the reasons we have for writing the report And the main areas that we consider to achieve will be at the turning point in accountability and legitimacy for the bank I haven't got control of the slide Right so our current economic institutions are not really fit for purpose We're in a disinflationary world, only this week Mervin King, the former banking and governor Spoke about ongoing stagnation that central banks have little in the toolkit to address So there's a productivity crisis in the United Kingdom and abroad And that's twinned with a financial sector which favors extractives rather than socially useful activity Central bankers aren't really responsible for finding themselves here His government austerity exactly when it was least useful Left central banks as the only game in town is a popular brain So they've been forced to choose between failing to meet their mandates And taking extraordinary action through policies like quantitative easing that are poorly understood and immensely unaccountable And because they're so overstretched, crucially central banks currently lack monetary space to respond to the prospect of another crisis So this is for practical reasons with policy interest rates at a much lower level than when the 2008 crisis hit But also political ones in the central banks are nearing the narrow limits of the legitimacy that's sparsely afforded to them By the Orthodox model of central bank independence So positive money has worked for several years doing great work to highlight these shortcomings And we've said many, many times that a serious response will require more radical policies It's clear the change in that direction is coming On the left there's new economic thinking The Labour Party has commissioned high profile reviews of the Bank of England's mandate But an appetite for change also exists among the form of guardians of the establishment You see pointed reflections like these in pages of the Financial Times and the Economist quite regularly And very interestingly, BlackRock Investment Institute, which is the asset manager's research arm Published a study for this August which claimed that unprecedented policies will be needed to respond to the next downturn It posed a soft form of coordination between fiscal and monetary policy And I'm quoting, via a standing emergency fiscal facility Which is quite remarkable to be able to recognize But these kind of radical policies must not be implemented without very strong provisions for accountability The question is to ensure that what emerges enjoys deep social and political legitimacy But are also being effective So that's the goal of the paper we wrote and was being on today It draws on some academic theory but also makes practical proposals The current model of the Bank of England's independence serves to be workable But also to accommodate policies radically enough to fix the problems we face And the research conducted over several months in exchanges with former senior officials from the Bank of England Other academic experts in central banking and positive money engagement Relaged with Parliament's scrutiny of the bank's work And from that process we identified some key areas for improvements in accountability Which I'm going to run through And some of these have been identified and developed by the bank itself to give it credit And there we've encouraged further progress But in others, a critical distance from the institutions helps see a report So three of the areas concern the arrangements Which are used to shape how the bank makes decisions and how they're and the oversight of the decisions The first goes right to the heart of the questions who make these decisions We looked at the process of appointments to the Bank of England's Monetary Policy Committee, Financial Policy Committee, and Prudential Regulation Committee Now appointments to these key decision-making bodies And in particular those which govern financial regulation Are worrying reliance on the financial sector to source candidates And moreover in the UK secrecy has too often characterised the hiring process Producing naturally right speculation in the media Which all means that Parliament, via the Treasury Select Committee Cannot exercise proper scrutiny of nominations without risk of a scandal as in the case of Sherlock Holmes' resignation Now examples from other countries can guide us here So the Swedish Riksbank solicits suggestions from groups in wider society Aims for an even balance of men and women in a long list of 10 to 15 individuals Which in now examples about three or four for final selection And so to make a critical improvement in transparency of the Bank of England's process It stands for the chancellery of the East Checker to ought to publish openly Both the details of the application process and the reasoning for selection And also the short list of candidates for scrutiny by the Riksbank select committee Before the point of maximum attention And the second area we considered was dialogue Quite broadly between central banks and legislatures themselves But also more recently had direct channel of communication between central banks and the public So on the one hand hearings for bank committee members Before the Treasury Select Committee are crucial But too often present a one-sided reflection of the bank's official opinion on a policy matter So these hearings we say need to be bolstered by a regular call for evidence From civil society and academic academia But that should also extend to the bank's regular inflation and financial stability reports As much as the irregular inquiries in particular issues And the bank also has a new initiative for citizens' panels That's a welcome innovation, it's where senior bank officials can engage with members of the public They can gather information about the effects of its policies And improve societal understanding and trust in return So this institution should be expanded, made fully transparent We also propose that it be linked to parliamentary inquiries By published summaries of the evidence that the bank receives The third area concerns what happens during economic crisis Which is often said when decisions really count So due to the emergency nature of a recession And other massive interventions in financial markets We're born during a period where democratic institutions Were relatively unable to exercise meaningful scrutiny But that should be no excuse for avoiding retrospective scrutiny The bank has published information on the distributed impact of its monetary policy But only after becoming under pressure to do so And naturally its analysis will also be marked by institutional self-interest So crisis policies demand full examination by independent experts So we can learn, improve and avoid repeating the same mistakes of society Now, those massive monetary policies were more extreme than they might have been Because of fiscal austerity So in a sign of the part of multiple times that we're currently in We can see positive money agreeing with BlackRock And pushing for a mechanism grounded in firm principles For fiscal policies to coordinate with monetary policy And the parameters for that institutional arrangement Must be established before the next crisis, before it is too late And in one fourth and final area We go outside of the current arrangement of the bank To look at the broader question of purpose So fundamentally to address the UK economy's difficulties with this time Bank tools of governing and shaping the banking system are going to be pivotal A massive spike in regulation following the financial crisis Really addresses the symptom but not the cause That is a hugely concentrated private banking industry Incentivised to lend to existing assets Rather than building new societal prosperity So correcting this will require more than the bank alone can offer But also more than it should be tasked with deciding alone So that's why we recommend finally that the government create a commission To establish a policy of credit guidance in the UK Where the bank would work in tandem with government departments Under their instruction to achieve more political goals Such as stable reduction in house prices Or an improvement in business lending Of which we sorely need And that's the future if actually also in many ways For past monetary policy So that's an overview of what's in the report I of course recommend reading it to engage with it in greater detail The overarching point is that all of these areas have to be complementary We need a comprehensive overview And plan for the UK's monetary regime to meet each moment's challenges And the political crisis we face in terms of the moment Thank you for your attention I'm delighted to have you for our text on that Thanks so much, Rob And we'll have to hear from Professor Skedelsky now Thank you I suspect we'll soon be seeing from roughly the same hymnsheet this morning The basic point is that the theory of macroeconomic policy And no coherent theory now exists Fragments of pre-prash orthodoxy still linger Together with increasing calls for fiscal input Which reflect both the disappointment with monetary policies In the last 10 or 12 years And also the expectations of a new recession For which we're unprepared But no clear idea exists of how fiscal and monetary policy Are to be coordinated to prevent recessions And deal with them when they occur This is because pre-prash orthodoxy Abstracted from the possibility of these sorts of recessions And that is so it's a level of theory From the level of theory that we need to think about the institutions And then why did pre-prash orthodoxy develop Because that in turn was a real response To the breakdown of the Keynesian macroeconomic constitution of the 1970s Succinctly stated by Nigel Lawson in his Mays lecture of 1984 And I quote, it is the conquest of inflation And not the pursuit of growth and employment Which should be the objective of macroeconomic policy This wisdom came to be embodied In the idea of independent central banks being mandated to achieve price stability And given one tool, interest rate policy, to achieve it And that was the whole of macroeconomic policy Everything else was unnecessary Now at root the conviction that political management of business cycle At the behest of vote-hatching politicians Was the cause of the problem It was to get politicians out of the business of macroeconomic policy That the independence of the central bank was created And its very limited target introduced So that kind of thinking reflected the triumph of Milton Friedman And Milton Friedman believed that in the absence of inflation The macroeconomy would be stable And therefore there was no need for more extensive government intervention In short, the only macroeconomic policy was monetary policy And fiscal policy was to be passive It was to support the Bank of England's mandate By running balanced budgets The only issuer of money in this new constitution Was to be the central bank itself And therefore it's obvious that there couldn't be any monetary financing Of the deficit In fact, any deficit should not involve the creation of new money However, this outsourcing of responsibility for macroe stability To central banks entailed a huge transfer path From elected governments to unelected technicians Formally the technicians were accountable to government and parliament But paradoxically their credibility depended on them not being accountable To government and parliament And that is the problem at the heart of the proposals you made I mean, if you start appointing socially necessary people If you like, we want to put it that way to the Bank of England Then what effect does that have on its credibility? Its credibility now depends partly on the fact That all the people who were in it come from the city That is precisely the point And I don't know how it would work exactly if you started widening the membership To people who are non-expert in debt management And the technical problems which are connected with monetary policy So we may say that this lack of accountability wouldn't matter so much If the new policy, the orthodoxy had turned out to be successful And politically neutral But of course it did neither First of all, and very importantly It couldn't prevent the collapse of 2008 The point already made And quantitative easing could not bring about anything like the robust and durable recovery In fact, what the crash revealed was the weakness of monetary policy And this is something Keynes has pointed out Many, many years we are always trying to reinvent old wisdom as we go along And especially in 2008, 2009 it was clear that the central bank bailouts were part of fiscal policy They were guaranteed by the taxpayer Whenever they weren't monetary policy And the second point is it's not true that monetary policy Not true that monetary policy is neutral It has distributional effects And the way of practicing in the UK has been on the whole to benefit the rich And that's why that's the rationale for that now forgotten call By Jeremy Corbyn for people's quantitative easing And the way back he was very much influenced by the distributional consequences Of the way QE had actually been happened So my bottom line is the question of bank accountability Can't be addressed separately from the theory of macroeconomic policy itself If the Friedman Lawson view of the macroeconomy is right Then the issue wouldn't arise If it's wrong, as I believe events have shown it to be Then the focus needs to be on the requirements for macroeconomic policy And the institutional changes which are contemplated have to be in that context Thank you Yes, thank you and I have to say I find myself agreeing with just a bit everything that Robert, I can say I'll be coming from the islands and the swappers We would be sitting from a sand sheet rather than a thin sheet To see that as it may But with this issue, you made reference to the debate that we had in parliament in 2016 And the reason that I call for that to be Was because I've put any number of written questions, a number of oral questions To the treasury questioning the effectiveness of monetary policy And frankly I was getting nowhere And the reason I was getting nowhere Is because the chancellor, the executive in this team Were effectively able to say nothing to do with us This is a matter for the bank of England And that, I think, addresses the point that you made, Robert About the elected politicians having past responsibility to An elected technocrats And it's really quite extraordinary Just as you've done, you've discussed the distributional effects of this And I recall from the Bank of England report into this in 2013 And I remember, rightly, I think the top 5% of the society And when you put it to context that what happened I remember the day that the QE program that was announced Under Gordon Brown, the 19th of March 2009 And you can actually see that the FTSE 100 dropped at that point So we've seen a remarkable increase in the value of financial access Since then, the stock market, which has increased by 70% Yet over the course of the last decade, the real wages have declined So there is another issue That what we've done, in effect with quantity of using Would reward in those that were responsible for the financial scratch And those that have paid the price of that are ordinary folk And I do wonder, in the context of that If we wouldn't be in the mess that we are with Brexit today That we haven't made such a hash of the recovery from the financial crisis Away back in 2008, it really is quite extraordinary And I think for anybody looking at this It's that disconnect that we have between monetary and fiscal policy And I've seen very little analysis over the course of the last few years Of what the effect of QE has been in particular on M4 And I think it's something that we need to do to discuss the effectiveness of that But I have to say, when I was listening to Rob and talking about credit policy as well I think there is another factor that I think we do have to consider in this And that's the interaction between credit policy and the provision of capital Because one of the hindrances that we have in the UK Is the lack of access to capital for growth The banks historically have never invested in that And that's one of the reasons why in Scotland, for example That we're establishing an investment bank through the government Because it's the lack of that development capital Which is a very, very considerable factor The report that you've done has to be welcomed And we need to make sure of this debate that we're having That we have that political accountability And in particular the role that's written in select committee Has to be addressed in all of this But there are other factors I think when you consider that Interaction between fiscal policy and monetary policy And indeed taxation policy Because you can't institute that from this debate as well And I'm minded by a report that Andy Haldane A speech that Andy Haldane gave At a corporate finance conference at Henry University And he was looking at the use of capital of US corporates from the 1960s Up till I think it was around about 2015 at that point And what structure that way back in the 1960s That 10% of the free cash flow of US corporates Was going to share very, very significant dividends By 2015 that had risen to 66% It's a little wonder that we're not delivering Sustainable economic growth When corporates are becoming cash to shareholders To the extent that we are So taxation policy has to be a factor that looks into this as well It's not monetary policy, it's not fiscal policy There's a whole gamut of policy responses That has to be looked at in the round and all of these things But I have to say that I really do welcome you to the report If it's an important contribution to the debate When I'll finish on this, when we come back to The debate that we had in the Commons in 2016 Vince, unfortunately, was temporarily out with Parliament That I'm sure he would be in that debate But if you watched that debate far as I'm sure he did I think there were only 6 MPs that anticipated in that debate And I want to commend those that did speak Because I can remember the contributions of very clearly Steve Baker, who was then a government On the government side as a back venture A hermit Goodman from the Labour side That spoke with great intellectual nations As well, my colleague George Kennedy Used to in fact be my monetary economics lecturer But the scale and the breadth and the width and the depth Of contributions were solely limited And we had a government minister that summed up the debate That quite frankly didn't know a single thing That he was talking about It was one of the most depressing experiences That I think I've ever had And the fact that so few members of Parliament Were prepared to enter into the chamber Never might participate in the debate And I'm afraid to say that you see quite a degree To both members of Parliament You'll find to do the rise and flip over So there's a hell of a job to be done To make sure that there's a proper understanding Of the issues which have such an effect On the life of a lot of positions I largely agree with what's being said But perhaps I can stir up a bit of complacency Defend some of the things that have happened I made my speech in this place in 1997 In support of Rue and Graham's Decision to make the bank payment independent In parallel to create a set of fiscal rules I thought it was a very big advance in policy And it remains relevant If you wonder why it's no longer relevant Of why it is relevant Look at the United States A few weeks ago Four ex-governors Ex-Chairman of the Federal Reserve Had to speak up because Trump is renouncing The current Federal Reserve As a bunch of boneheads Because they refuse to manipulate Interest rates to help them get re-elected And that in a nutshell Is why operational independence By central banks is important And it's what used to happen here The politicians used to play with interest rates To help get re-elected That's why we assume to use a set of rules And although Robert McCoss is quite right That there were major deficiencies In the response to the financial crisis The simple truth is that active monetary policy Whether it's orthodox or unconventional Did help prevent a slump Developing particularly successful in the United States But here and elsewhere And of course there have been nasty side effects Notably the pumping up of asset values Particularly property But the fact that that's happened Is down to the failure of government Rather than central banks If we really worry about inequality and wealth We should be taxing houses Politician work of course Because it's quite a set amount of personal courage But blaming monetary policy And central banks seems to be perverse And they've done largely what they were supposed to do There have of course been a big failure In economic policy and the agreement Some of the critics of the coalition That I was part of We had an argument raging there And the things at the time We should have borrowed a lot more money Low interest rates to invest It's a big policy But that was a failure of government Of treasury It wasn't a failure of the central banks And if we look at the last few years One of the most important interventions Of the Bank of England Was the day after the referendum And it's galling actually That all these Brexiteers Say Brexiteers is a problem Because look what happened after the referendum Nothing happened except a big evaluation And that was largely a successful intervention By the Bank of England Which we all took for granted So looking backwards I don't think a sustained attack On the current framework Of monetary policy is justified But looking forward Just two points really I mean first of all Is the present structure equipped To identify future risks and dangers Well, I don't know what would be better The current governor was quite courageous In pointing out the dangers Around stranded assets In the energy sector for example Quite farsighted I thought A few weeks ago The Bank of England together With other central banks Through the Bank of International Census Several months identified a big new risk Which is bank lending To non-financial institutions Like hedge funds They pointed out That there is more of this To be flowing through the Cayman Islands Than the rest of Italy And all kind of weird and dangerous things Are happening But the present structure Is perfectly capable As capable as anybody can be To identify future risks And if this major recession Which we're all worrying about Does happen as a result of Protectionism, Brexit All kind of other things that could happen So probably do China and so on Are we equipped to deal with it? Well the obvious problem Is the other speakers have mentioned That it's difficult to use interest rate Of policy being a short term interest rate So we're really close to zero Long term interest rates reflected In the years on bonds are negative There's only 17 trillion worth Of negative yielding bonds Out there in the system So it's very difficult to use Conventional financial policy Or even asset purchases In this situation So what else would you do? Well one We've already referred to Even more aggressive physical policy And we're borrowing to invest And we've discussed that But that's a government initiative It's not down to central banks But they've got to be coordinated But the really controversial issue Is whether we would in extremists Have to resort to what's called Helicopter money Effectively printing money Putting money in the hands of consumers In order to save off the depression That hasn't happened so far Except a little bit on the margins But it could happen here But if that's what's happened Surely we would want the bank of England To remain independent So it can judge whether that's necessary And how much it's necessary But the expectation of where to spend the money Is a political question It should remain very firmly With ministers in power So I wouldn't argue For a fundamental change In the way larger policies conduct Thank you Thank you That's all I welcome you to the floor I think it's very good I think I am someone who Has never been entirely comfortable With the policy to Completely hand over the show Or independent to central banks Part of policy is for the independence Of the central bank But I think that the review that we've commissioned Into the role of the bank of England Is to give it new powers Partly to oversee Target productivity in the economy And also to ensure, I suppose For one to have a better word, policing Of firms on their decarbonisation programs Which I think is something I haven't heard mentioned On the panel yet about the issue of Decarbonisation and the climate crisis And I think independent central banks I think the firm has used To have a role to play Obviously our, the government of the bank of England Has been at a forefront of Discussing and pushing forward policies Which are moving that direction I think the good thing about this report Is that if those two key areas What activity and decarbonisation And additional roles of the bank of England Are to come into play This will make this one of the powerful Central banks in the world And I think what this report does Shows that there needs to be a far better balance In terms of democratic accountability Because I think I would say Of the past 40 years that Institutionally with the bank of England With a range of institutions across You know, England's economy Whether they be local economic partnerships Sorry, left with economic partnerships There seems to be an erosion Of that democratic accountability At the heart of the last 40 years Of the economic project And I think that has come at a price So I welcome this report Because what it's doing is It isn't throwing out the baby with the dark water It isn't saying that there isn't a role For a level of independence I don't think it's as easy to say that Politicians, bad Independent central bankers, good The truth probably lies somewhere In the middle If I'm going to hedge my bets And try and get in slightly But I think what we do need Is greater accountability Less of paperness within the system And I think if we have that Then we're going to have a system Where you may be able to get a balance In the future I think the other area of the report I like was on the issue of credit guidance And I think that's something where Increasingly the bank of England Helping and directing where Finance into the economy Lending goes, I think it's going to be critical One of the things that I'm very keen on In my role on the Shadowground Bench Is our great sustainability in the economy Is this putting out on my account? Yeah, exactly And one of the things we understand Is that this simply isn't going to be Achieveable on the scale that's required In the term scales that are acquired By simple taxation and fiscal policy There's also going to have to be A component of how we raise that money And I think if credit guidance Is a component of any future bank of England And increasingly enhancing how that operates I think that could have a big role to play What I would conclude on is I think the other, sorry I will just come back onto the other part I really did like which was on Making the Bank of England In terms of the way that it recruits The NPC, how that is done I think making that process more transparent Making the people on the NPC Reflect and represent a wider Cross-section of our society From civil society, trade unions I think seeing this Essential bankers as high priests Technocratic priests of an economic system Which very few people understand Has to end And this is about making our economy More approachable, more understandable By a wider range of people across our society Because ultimately unless we can help Democratise our economy Give people a sense that this isn't being done to them The things that are happening to them Are simply being done to them But they also have a say in them Whether that's directly, indirectly Or through democratic accountability processes Of politicians and others being involved Then I think that's critical for the future We're seeing at the moment I would say A malaise within our democracy There is a crisis within democracy You don't have to go very far Just so we can see what happens in Parliament You'll see there is a crisis in democracy I don't think it's terminal But we have to make sure that we make The right and correct decisions And policy choices And that means that people Have to be involved in that process And I think this institution So important, so large So crucial to our economy Making sure that we can make it as accountable As democratic and as transparent as possible Is the right board To bestow some way into achieving that Impressed for time So usually we get you to speak to each other first They all get to talk But it should be a bit of time at the end We go straight to getting a few questions From the floor So if you've got comments or questions It's quite a big panel We'd love to hear from everyone I'm going to take three on this side Sorry, you were after the three And then I'm going to come over to this Hello, my name's Nina I'm not an economist I've drawn from a good money From the Centre for Idea Interest One of the things that I've observed So this isn't really a question Of conservation Is that with globalisation We have enfranchised the very bottom Of society In the far-flung reaches of the world And possibly Lack of demand at the global level Is to do with the Completely fracture Bizzled out Lack of any demand In our European sense For goods, services Or whatever This is just an observation Thank you My name's Prashan Zair Last week We released a report About the systems How much We were promising a stable way In many things We stuck to the agenda So much so that Years ago, Mark Carly and I We presented to people back in China Set forward a quick review Of our systems And so far, second-hand Events that have been concentrated In Japan Over the years Really interesting On My question is really What to say to be easy The problem has been it's been too much Focused on Neutrality As a sample back stander In the UK, about half a trillion Pounds worth of assets Same About four billion Pounds worth of assets In government bonds Bonds that should be bought Large amounts Most assets All in gas I welcome the idea of having Outside people there Because they have a more Particular way of being There are actually two things to happen One is that more kind of Care is used In the purchase of what we're using We very much advocate Decide these are assets At risk of being stranded In particular, oil and gas Stop buying these And give them a large haircut Secondly, they're selective And tries to buy more greenhouses Which there aren't enough of yet And I'm very interested in this idea Of credit guidance policy This is still being used in India In China, in Malaysia Where the banks are actually selected To be going out and lending money To banks to lend in some agricultural sector SMEs Schedule classes in India So that'll be something where Some of us, I think, by the diverse group Of governments might have it But we do need technology And we're actually doing a great job Great, just to clarify, that was just a comment Right, a little bit of a question No, it was a question What do you think about The government's essentially The point is to do This much. I think If you just look at the six points At the bottom of page six They're unarguable, they're very straightforward And there's no great dilemma here I'd like to refer People, for one, who have come By Martin Wolfe in about 2013-14 saying The British Banking and Financial System Is an enterprise to leverage That asset price in which the bank Being of them has been complicit I'm split about this My mum's nursing home part moved Just under 100,000 in 2001 To about 350,000 In 2014, just Before she went in But that's too cocky to be so On the other hand, I have to share My house with a 30-year-old son Whereas I was able to buy Four-bedroom house in Ewing For 14,000 in 2015-19 77 Now on Zupa for 800K So a lot of my generation Think they're doing very well While the younger generation waits For them to keel over And Currently, the banking seems to be And the financial system Seems to Continue to create this Mirage If you look at that The link between land ownership And land inflation prices We've got an acre for everybody in the country Virtually Costs 100,000 pounds to build An average 70,000 To actually put that And number 2 million on 120,000 1% of the land they become sharing And you've got to buy a quarter Of what Banking and Financial System has created In Quantity to be easy Quantity to be easy Thanks very much On generation and equality So we'll pass you can start With your corporate bond purchase scheme And market inequality And you can explain a bit about What happened Okay Yeah, thank you very much All the questions It's great to hear people talking In this event about Climate change And decarbonisation And I would Refer anybody who's really interested In how that might interact To a report that came out last year Called the Green Bank of England Where we're looking at Precisely that question I would agree with you That This kind of initiative that's been shown And searching for New answers to problems that Have very much as a contemporary time Is welcome It's great thinking from These individuals With Kind of the regulation That's come out after the financial crisis To manage the financial risks But then also the movements that we're seeing In regard to climate change And then bond purchases And stabilising the economy But also now this question Of addressing climate decarbonisation It's just really clear That central banks are being Moving towards doing more and more and more That's just what's happening So macroprudential regulation Is actually, sorry, it's a jargony term For the Watching out for systemic risks Across the whole economy Which is very much the new Mode of regulating following the crisis In many ways That actually looks quite a lot like Credit guidance could look Really in that it's Identifies particular types of institutions That might be especially risky And identifies types Of patterns of lending That we ought to avoid But it doesn't go the whole distance And because we're trapped In this situation That's gone So rightly identified Where we've got a Blame-passing agenda But from both institutions The Treasury on the one hand And the central bank on the other Are happy to say, okay, these are actually The goals we want to achieve Decarbonisation or an improvement Of lending to seven areas We never go that distance, we just let The bank Or indeed other central banks That are involved in The network greening fund system Across the world this dilemma Is happening where These institutions are coming under A lot of pressure On one side from People who don't want things to They see this as a mission creed There's a massive expansion of power On the other side from people Who want them to go Go further And so that's exactly what we're trying to address Really is to make sure that When these New phases Start They've already started, but when we get deep into These new phases When the central bank continues to buy bonds There's a mechanism for saying How Can we make sure that it's not buying Possibly some new bonds, which it is As well And exactly that Situation of passing the blame Is what we see with the corporate bond budget Where Ourselves and other groups that Try to address the decarbonisation As it obtains to the bank We said, no, you really ought to use A corporate bond scheme to buy any possible Bonds, because that's just You're just inflating a stranded asset That's a terrible idea And they say, hey, we're market neutral Don't get at that, it's nowhere near our job To go into the market and say The possible fuel bonds are not a good idea So we really need to break that bedlock That's a bad treatment we've got ourselves into And it's totally right that treasury Just doesn't want to have anything to do with it I think that's done chained Because it's the risks of avoiding it Or the costs of doing nothing But it's a good thing to get a bit further Thanks, Rob. Does anyone else Want to pick up on that point Or intergenerational inequality Or the first question around globalization And lack of demand? Any comment? Just on the lack of demand I would say, what kind of demand Are we talking about? And I think increasingly Some of the old language And some of the old policy objectives Is stimulating demand for yourself For its own sake But for the economic reasons that it can Have in terms of its impact on the economy I think we're now moving Into an era where resources Are finite Growth is finite I think in terms of We're approaching 9 billion people And more by 2050 There simply isn't enough planning For the lifestyle that we In the developed world currently have For everyone, so that doesn't mean We suppress what they do and change And keep on doing what we do That means that we all have to change And move on to a more sustainable footing So when we talk about demand side economics Then I think we have to talk We have to insert sustainable demand And what is it that we demand? I think that's now an increasing part Of the narrative that politicians And economists are picking up on But not fast enough Just don't think that's something That's necessarily The gender of the moment Yes, I just worry That with modeling A lot of different issues I mean, there are a whole lot of issues That politicians have to do Controversy Subcontracting these problems To their agencies Like the Bank of England Is just a scapegoat I mean, a classic example is this Problem with fossil fuel companies And they're really serious about Global warming And there are a whole lot of things we've got to do Like taxing motorists And other things that aren't very popular That politicians have to do it And if there is a high risk Attached to The assets of all the companies Then pension funds And the rest of them Who hold those companies assets Have got the whole board in reserve Against that risk Using the Bank of England to sort of Manipulate policy Seems to be to be completely perverts Just to take one example When I was in government One of the things we were desperately keen to do Was to get more lending to small business And I went Actually to Over the King and said Instead of buying all these Bonds from big corporates Why don't we buy bundles of loans To small business Well, you know, it's a great idea But nothing to do with me If you want to then money to small business Use taxpayer money And start up a business bank Which is what we do But he was quite right actually It's a political question And it involves fiscal policy And the use of public funds And saying it's the job of the Bank of England To deal with all these complicated Difficulty issues Is completely directing the conversation Can I ask you a quick question Because I guess what muddied the water Was this 10 billion corporate bond Perch and scheme If you would then answer that Would you have said that's not allowed You've only got it up You're only allowed to buy government bond Yeah, so I would have Step to a narrow definition Interesting, thank you That's right if you want to Talk about the Different products which were Available at the time after the crash And I was a borrower leader at the time And you know, we were just So desperate to build more Social homes because we knew it was A really good investment because Over a long period of time a building cost Of even an inexpensive London borrower At that point about 110,000 to 130,000 to build a home Which over 10 years at A third of my footprint you can pay back Depending on the size of the property But then the government Is going towards to help to buy a scheme Which is putting money in people's pockets And I completely understand the politics of that But I just feel in terms of The capital investment, we just Would have been so much further down Where we need to be now Rather than still just building as though In the end so much of that money Went to the developers And probably developers have made An absolute killing where we still Really haven't made any progress On younger people getting onto You know, I feel in terms of the products Which government have decided on Help to buy a scheme of value And I really hope that we Can do some more convincing on just The capital needed to put into Really high quality social housing stock Which we can always use it in an emergency And I think probably in an emergency In a recession as well at the moment Without wanting to depress Everybody in this room Robert would you like to comment on the new Buildings? Do you like it? Are you going to have another one? Yeah, and I'll come to you best Great, so there's Rod, Yellow, Jean-Pierre And is there one more on the next side of the room? What about you? I've heard you ask a great question before Yeah, we'll start with you, Robert I've got Rod Dowler from the Industry Forum It does seem to me that If we get the level of Investment that I think We need from which Bernie Sanders Thinks might be like 8% of GDP Over 10 years in Decarbonization We have Got to find some new way Of financing that It does seem to me if we did that It might have the same Beneficial effect that FDR's new deal and Actually the second world war had Getting the US economy Out of recession After the big recession in 1928 Now, I can't seem to convince anyone Of these beneficial effects So how do we change The attitude of politicians And economists to see that this Could actually avert What I think is a coming world Slowdown on possibly recession Thank you I've got Mark Mark I'm a Korean citizen Prior to moving to the reasons Why Surely When the lady here referred to the Indian subcontinent 10 years ago The bulk of that population Were living sustainably Until they were enslaved into the Money go round by President Modi to provide With coal-fired electricity That have been earn money to pay for Is the economy sustainable At all Or rather I suggest The energy I know that's going to be a cave So I just wanted to bring The energy generation Do you have any questions for Lauren? Sure I think looking at the future of Credit policy The market will probably Feel harder and harder to access Do you think that With What we've seen is Critics have a lot of control Over the years Over the years Because critics have been to Lead By a lot of They always have A lot of momentum The independence of the bank With credit policy We should have Close to afraid of this That was at the back of my head Do you think that Our credit policy Do you think that Things like 6th and December The work world To Build a new settlement Or do you think that we should Keep it completely independent And own it entirely Or what? Thank you so much Can you start with you Robert? I'll respond to Certainly the first question You say that It's been very hard for you to persuade anyone To make these investments And I agree Green energy would be Really rough at the top of it The point is there, you have to get beyond That's why it's so hard to persuade people And the answer Is that most economists Don't believe you have to have Any public investment at all I mean Why doesn't the market Do whatever is necessary And arrange a structure Relative prices That will simply Favour Green projects Now Behind the privatisation policies In the 1980s and 90s There was a very, very large Public investment going on In the 70s And most of that Was discontinued And the ratio of public investment To total investment has collapsed And that was a result of ideology And it was a result of Ideology, ideologically Driven economic theory Unless you sort of get at that You're going to be killed every time You know, you say this And Vince's Business bank is an example It's a great initiative, are you still there Vince? I can't see you But you know, it was very small And it was very, very, very limited And they didn't basically believe In, it was a sock To the Lib Dems really And they didn't believe in it They didn't believe that it was necessary So unless you get at the theory behind it You're always going to be Stiny, that's point one Point two, why does one think That democratizing an institution Is going to make it more radical? I mean, the Labour Party You know, it Once it started competing for power And its appointees Started to become ministers And officials Labour Party financial policy Was incredibly conservative All the way And actually I made a story as well Tabling in economics And I know the history a little bit So I'm not sure that's the panacea To our problems The solution to our problems Thank you, Rob I wonder if you could pick up on the Citizens' Assemblies Because you talked a bit about the Yeah, telling citizens to be involved Yeah, thank you Great question I'm going to state it to Citizens' objections actually In that Really By talking about Citizens' Assemblies And that phrase Has become quite symbolic The idea of a much more positive Historic policy And then that gets at what's at stake here Which is not just that There is a major Set of economic difficulties And though it's obviously tempting To push back into talking about that Really The central bank is part of our politics And it's emitting political Institution And it's political Because The trade-off between inflation And unemployment that it's supposedly Set up to manage In a supposedly neutral manner And it's not in fact neutral at all Even if the trade-off is itself Simple and manageable Which it's not in the current Conservative masses But it's political Because of the different values That those matters represent But then it's also Just by virtue of being An enormous powerful institution And the way we see drift In these matters And capture by Powerful interests over time Almost is just an inevitability Especially when Democratic politics That's why it's so political So therefore it's not just about trying to design Monetary policy And financial policy Or whatever wrapper you want to call into all that All the things that the bank addresses It's not just about trying to design Those that they manage the economy better It's looking at this as what it is Which is also something that governs All of our collective lives And that we all have a stake in And the thing really Is, I mean it's Not even enough to say The average person doesn't know a quantitative The answer is that the average MP Doesn't know a quantitative answer It's an unbelievable separation From politics of these enormously Important things, and so citizens To send these Yes, I think it's Quite difficult to see Because it's just such a fledgling idea It's difficult to see how It will be linked to such an arcane Practical institution But the panels are a really, really interesting Initiative because Just because The link Between these people Who are otherwise completely isolated From the regular society To people in towns Around the UK Who are feeling the effect of these policies Just building that link at all Is I think incredibly important And then we imagine That The effect of building Greater trust and understanding over time That feeling of participation That itself is valuable But that itself can also lead To Reviving The links between Democratic parliamentary institutions The central bank itself And the monetary institutions that we're talking about here And people themselves Because those links have just withered Very much and no one really understands The other, which is I think The characterizes the A dire situation we're in today It's not just about the economics The economics, yeah maybe it's been working But it hasn't, it's been working that well But certainly what's not working Is our Collective political existence And yeah, I think so Thank you for raising systems in December Because that's a great phrase Great, thank you Rob So it's bits that you want to pick up on It's also known as The middle festival Yeah I just was going to Have a look at it People In India was never a sustainable Have you ever been here? Yeah many times I've never seen them in hand People were hungry India is now becoming A link from country Yeah they're starving Well they were There's much fewer numbers than are starving now And they were It's a very unequal country But it's now in a much better place than it was So it's much easier You've been living with quite I'm not as well Yes I just think picking up on the India question for me The issue for countries like India Or countries further behind India Is how But it's how do we Help them make the jump Over that kind of dirty 20th century Bays of the economy From 21st and I think that's where Countries like Iran have a real role to play Because if we are going to Develop decarbonizing strategies Know how technologies Then those are things that we are going to Have to seriously consider To make it through the coming century We're going to share those technologies Not necessarily trade That actually Gives them away Because ultimately If we don't do that If we don't help the developing countries To make the jump from where they are now To a more sustainable situation Then we're all going to hit The anchor If billions of people around the world Are using coal-fired power stations And so on That's a big challenge for the development world And something that I don't think Is actually looked at in enough detail I think in terms of Systems assemblies I think that there's a fantastic role For them to interface I think you made the point really clear Most politicians are not comfortable Making as an interface Between vast institutions Which are using extremely complex Detailed policy mechanisms Which affect all of our lives And now with the rest of the public I think that's a democratic necessity And I think holding Having these institutions behind closed doors Arcane High priests of the economy Isn't the way forward And I think that undermines how democracy works Especially if some decisions may Have an adverse impact On yourself and your community So I think it's just the basic of democracy That there is that interface there And I guess the question I would ask myself Is all central bankers are independent Or central banks are independent Well, do I think all journalists are impartial Impartial journalists just don't exist It's something you strive for They may well strive For bankers may well strive for independence But there are institutional bias Inbuilt into the system We know that Some of the policy mechanisms are being used The document highlights the distributional impact It's actually hunkered down On growing inequality And some of the quantities Have taken place So I personally think In terms of the opportunity To be able to impact that interface And influence how The central banks work And who they're working for I think is critical because I think what we can see Is that the financial system that we have While it does have some strengths It has many flaws And unless I've had my head in the sand It feels to me that we're heading towards Another financial Unstable period with potential Crash as many observers are now saying So it's really critical That we have as much of a say As in what to do with the policies And institutions which are Enacting that Just before Fran winds up Finally just to thank everybody For coming Please sponsor today's event But just to say also that Even what we're going to be debating today Around educating MPs About decisions that we're about to take Is a very big decision between These different deals on Brexit For example, and yet The Chancellor is refusing to give us The information between What's sort of been proposed Compared to say what was just made proposed Compared to say what Kirsten will propose There's two or three percent of A different point in all of those In terms of the impact on GDP Now we might sort of want to Do that and say well we don't know At least we can't educate MPs Unless they have access to information And I think Even the Treasury Select Committee is in a struggle To get the requisite information Out of our own government And we have a pretty robust system We have a chair of our parliament Who really wants to get that Information and help us but Governments have got to Really be able to adapt And as a particular government Where people aren't necessarily elected To take the decisions that they're trying to push Through our parliament So I would just say that With the best will of them all sometimes It's really difficult to get that information And to get yourself educated as an MP Thanks Chancellor and thanks so much for hosting We've covered a huge amount Of conversation on the UK economy How we need to Really challenge mainstream economics Which is a really important point To how we decarbonise And I think hopefully some of this discussion Got us some way towards what we think A new settlement for the bank of England might look like Or to thank our Fantastic panellists They've been really great in terms of the insights They've brought Obviously Ian can stay And obviously thank you all for coming Do grab a copy of our Our report on your way out