It has long been contended by some that such a leeway was healthy, because it allowed for competition and therefore avoided overregulation. Some progress in regulatory convergence has been achieved in recent years, in particular within the Lamfalussy framework, but clearly not enough. The proposal for a single rulebook of regulation has been turned down by some countries.
The ties developed then between the Federal Reserve and British monetary authorities endure to this day. The mutual trust reached a point that in 1999 the Bank of England asked Donald Kohn, then head of our Monetary Affairs Division, and now a governor, to review key aspects of the Bank of England’s monetary policy procedures and make recommendations for improvement.