The press conference is webcast live and usually broadcast on TV. People can subscribe to receive an SMS message about interest rate decisions, and Norges Bank was apparently the first central bank to publish its interest rate decisions on Twitter. International developments have made it prestigious for central banks to be as open as possible. But transparency cannot be a goal in itself. Our responsibility is to conduct an effective monetary policy in line with the objectives laid down by the political authorities. Transparency beyond that necessary to ensure democratic accountability is a goal derived from the main goal of conducting an optimal monetary policy. 18  Lars E. O. Svensson, Deputy Governor at Sveriges Riksbank, has argued that it is possible to evaluate monetary policy actions ex ante. See Lars E. O. Svensson (2009): “Policy Expectations and Policy Evaluations: The Role of Transparency and Communication”, address at the conference “Tio år med självständig Riksbank (Ten years with an independent Riksbank)” 11 September 2009. 19  See Nergiz Dincer and Barry Eichengreen (2009): “Central bank transparency: causes, consequences and updates”, NBER Working Paper 14791 and Petra M. Geraats (2009): “Trends in Monetary Policy Transparency”, in International Finance, 12, no. 2, pp. 235-268. 20  The new legal text establishes the so-called principle of free access to public records which provides public access to central and local government documents and the right to be present at sittings of the courts and of administrative bodies elected by the people.
It was written in 1992, just before we began the long upswing in the financial cycle that ended with a bang in 2007: “Whenever the recovery starts, there will be new participants, who will be less constrained by the experience of this recession than those who lived through it. They will repeat many of the mistakes of the 1980s, as many of the companies repeated the mistakes of the 1970s. The market will then be driven to levels which will prove unsustainable.” He was writing, of course, about the UK property market rather than the sub-prime market in the US or over-leveraged international investment banks. But I doubt he would have been that surprised; the subject of Bricks and Mortals is but one example of the self-reinforcing dynamics of powerful financial cycles which, if left unchecked, often end in tears, not just for investors but for the economy as a whole. I hope also that he would have thought the changes to the Bank of England’s responsibilities following the crisis – and the establishment of the Financial Policy Committee (FPC) in particular – were a major step forward in how we manage and mitigate the risks of the financial cycle. I want to talk a little today about the FPC’s role and how the Committee sees the current conjuncture in terms of risks to financial stability. I will focus on the UK property sector. That is not simply because today’s lecture is supported by the Investment Property Forum and the Cambridge University Land Society.