Indeed, I wish to argue that the evolution of central bank policy frameworks over recent years can be seen as an attempt to make them robust to  1  It was a term first popularised by Ben Bernanke, then-Chairman of the US Federal Reserve Board (Bernanke (2004)). 2  In Greek mythology, Nemesis was the spirit of divine retribution against those who succumb to hubris (arrogance before the Gods). The term hubris now typically refers to a loss of contact with reality and an overestimation of one's own competence, accomplishments or capabilities. 3  Loewenstein et al (2008), Kahneman (2011), Mischel (2014), Urminsky and Zauberman (2014). 4  Blinder (2004), Reis (2013) and Friedman and Schwartz (1963). 5  There are some obvious exceptions in research on monetary policy decision-making, discussed below. Sibert (2006) also discusses the topic of “Central bank psychology”. BIS central bankers’ speeches  1  psychological biases. I want to illustrate that by reference to the Bank of England’s policy framework. And, based on that analysis, I want to suggest some areas where a further evolutionary “nudge” in those frameworks might be warranted. 6 Behavioural biases in practice The literature on behavioural economics has sky-rocketed over recent years. 7 This identifies a long list of cognitive ticks that can affect human decision-making. All of these are likely to affect policy decision-making to some degree. But from that potentially very long list, let me highlight four biases which may pose a particular policy-making challenge.
Both FIDE Forum and ICLIF are uniquely positioned to advance corporate governance in the financial sector. After all, they bring together those who represent the ultimate governing body of financial institutions, with great responsibilities and accountability. Such an opportunity must be capitalised and not wasted. FIDE Forum and ICLIF should therefore complement each other and avoid duplication. There are significant benefits to be gained from an effective partnership where resources can be channelled to increase the collective impact of programmes and initiatives by the two organisations. In my own engagements with the industry, over the years, coordination and cooperation among financial institutions can become game changers for the industry. In this respect, we should fully appreciate the distinctive purpose of ICLIF and the FIDE Forum and how they coordinate with each other within the space of directors’ development. With close coordination and cooperation we can avoid the redundancies and wastage and realise the synergistic benefits from the alliance between the two organisation. Being a director of a financial institution will demand a lot from the individual. It is a position of trust where integrity is the norm. It should be, given the critical role of financial institutions in any economy. 2  BIS central bankers’ speeches  As a network of financial institution directors, FIDE Forum provides a valuable resource for directors as they navigate the heavy responsibilities that come with the position.