So members of the Committee vote on interest rates according to the economic data, which change from month to month, and the analysis of those data. No one takes a position that higher interest rates are a good or a bad thing out of principle. If you drove past an infant school at 40mph, you might well be described as driving dangerously fast. But if you drove at 40mph on a motorway, you might well be described as driving dangerously slowly. Actions must be judged in the light of the circumstances. In terms of monetary policy, that means that the positions which members of the MPC take on interest rates will change over time according to the way the economy evolves. But if interest rates themselves cannot be predicted, because they depend on changing economic data, what should be predictable is the way MPC members respond to those data. A predictable “policy reaction function”, to use the jargon, should, over time, diminish the interest which market commentators take in the meetings of the MPC and direct that interest to what is happening in the economy. So, as the voting record shows, it is seriously misleading to think of the MPC in terms of fixed camps of “hawks” and “doves”. As circumstances change, it is easy to imagine that the “hawks” shall be “doves” and the “doves” shall be “hawks”.
Even if we need to wait for the Parliament's proposal and the outcome of the trialogue discussions, this agreement is overall positive. On the supervision side, it provides the European Union with all the prudential ratios of the international framework. It also provides for the gradual introduction of the revised market risk framework, the Fundamental Review of the Trading Book (FRTB), which is still being finalised in Basel. In addition, a first step has been taken towards recognising the euro area as a single jurisdiction, in which cross-border exposures within the Banking Union are considered domestic exposures for measuring the systemic importance of European banks. On the resolution side, we have obtained an agreement to broaden the subordination requirement of the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) to  Page 4 of 6 beyond global systemically important banks (G-SIBs), thereby reducing the threshold effect between G-SIBs and other banks. In addition, the text defines a subordinated debt ceiling, very close to the international Total Loss Absorbing Capacity (TLAC) standard. However, this agreement contains a number of more problematic aspects about which we shall remain vigilant. To name but one, as regards the internal MREL, cross-border exemptions within the Banking Union similar to the methodology for calculating the capital surcharge for systemic banks would have been desirable.