But the case for realism about what we should expect is not a case for pessimism; rather the opposite. The macroeconomic framework in this country is sound and proven. And the real benefit from Britain’s new-found position of macroeconomic stability is that it provides an opportunity to improve our supply performance - to boost productivity, education and enterprise in order to generate the resources needed to raise living standards. Such improvements are, in the long run, both more important and more glamorous than the rather dull and repetitive role of the Bank of England in trying to maintain macroeconomic stability. The Bank of England is only the referee; you are the players. Unlike countries such as the United States, which has witnessed a significant and seemingly durable rise in productivity growth, in Britain the underlying rate of increase of output produced for each hour worked has remained broadly stable. We can take some comfort from the latest revisions to the National Accounts which show that productivity growth was not as depressed as previously thought, but it still remains close to its long-run trend of around 2% a year, insufficient to close the productivity gap between ourselves and our major competitors. Of course the Bank of England has to look to improve the quality and professionalism of its own activities. And, together with the Court of the Bank, the new executive team is exploring ways to enhance the effectiveness of our operations.
This poses a problem in terms of coordinating behaviour, which has to be resolved by policy-makers. However, time constraints prevent us from exploring this matter any further today. I would like to conclude by looking to the future. I agree with Franco Bruni’s analysis and recommendations. This crisis affirms the need for fully independent central banks in which the appointment of Executive Board members is not linked to electoral cycles, and where such members have long-term mandates. It also confirms how important it is for price stability to be the primary objective of monetary policy. This experience has shown that having more objectives than this does not make the task any easier, neither in terms of preventing a crisis, nor resolving it. Given the objective of price stability, central banks should also aim to contribute to financial stability but they should also have instruments at their disposal to achieve this. 4  BIS Review 82/2009  Finally, whenever central banks are given specific powers, they are also expected – and rightly so – to exercise accountability. Franco Bruni is no exception, but in this regard he cannot be distinguished from a certain trend which erroneously considers the ECB to be less accountable than the Federal Reserve, particularly with regard to parliament. The appendix gives details about the methods of reporting to the respective parliaments, in terms of reporting, hearings and responses to questions posed by the parliament.