Fisher talks up new financial watchdog

The launch of a financial watchdog overseen by the Bank of England is “truly ground breaking” but hopes it will maintain financial stability are “over-optimistic”, a director of the financial policy committee (FPC) warned in a speech last night.

Paul Fisher, who is director of both the Bank and the new FPC, which is being established as part of a wide-ranging overhaul of the UK government’s management of the economy, said: “Just as monetary policy makers will never be able to abolish the business cycle, financial policy makers will never be able to abolish the credit cycle.”

Fisher said the FPC is charged with “detecting and reducing threats to the financial system as a whole, and ensuring that the flow of financial services to the wider economy is maintained”.

Although the FPC is not yet in charge of “macro-prudential” regulation, Fisher confirmed the body was up and running.