But unlike monetary policy, which usually follows the Tinbergen rule of having as many policy instruments as there are targets, fiscal policy tends towards perpetual indeterminacy. It has to achieve multiple objectives, including cyclical stabilisation, supporting long-run sustainable growth, or dealing with the efficiency-equity trade-off, through the use of multiple, but often insufficient, instruments and subject to constraints, most importantly, the need to ensure the sustainability of public finances. In this context, the history of the monetary union reveals a constant tension between the quest to achieve short and medium-term national objectives and the hope that the common institutional framework would yield consistent supranational outcomes. The shortcomings of the original framework are well known. 2 They can be summarised in five points. First, the original rules set at the time of the Maastricht Treaty were overly simplistic and did not take into account the impact the cyclical position of the economy has on the headline deficit. In particular, it failed to avoid expansionary (procyclical) fiscal policy during periods of high economic growth, as the rules were silent about the need for Member States to save during good times. And this also led to contractionary fiscal policy during recessions since the deficit rule would call for adjustment at times when the automatic stabilisers were pushing public finances deep into the red. Consecutive reforms attempted to address this shortcoming, at the cost of increasing complexity. Specifically, the focus shifted to the use of medium-term “structural” variables.
Early evidence from the Bank’s Decision Maker Panel Survey suggests that the impact of Brexit holding back business investment growth may be less in 2018 than 2017. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  What is the Bank’s role in this context? I have been thinking about the whole range of policy challenges associated with productivity since the aftermath of the financial crisis in my former role at the Treasury. My role has changed since then, and I naturally have a different focus in my new role. It is the Bank’s responsibility to deliver monetary and financial stability. But by delivering low inflation, a safe and sound financial system, and a payments and settlements system that operates smoothly, we are ensuring the right environment for business investment. But our responsibilities for the financial sector mean that our role doesn’t stop there. For example, we can play an important role in supporting the development of new technologies (Slide 8). The Real Time Gross Settlement (RTGS) renewal programme, which I oversee at the Bank, is a major investment in the UK’s financial infrastructure which will deliver a range of new features and capabilities. RTGS is the means by which central bank reserves are transferred between banks big and small, and settles around £ of transactions per day. Although we decided that distributed ledger technology wasn’t sufficiently mature to support the core RTGS system, we will ensure the system works with that technology, however it evolves.