Evaluating Central Bank Strategies: Insights and Reforms
King's Business School was delighted to host the annual Bank of England Watchers' Conference. Join us as Claire Lombardelli, Deputy Governor for Monetary Policy, delivers an influential speech at the Bank of England Watchers' Conference, unveiling the bank's refreshed approach to monetary policy following the Bernanke Review. The conference explored reforms, challenges like inflation dynamics and labour market tightness, and the innovative integration of data analysis and scenario planning.
The discussion expanded to central bank strategies under uncertainty, with insights on scenario testing, macroprudential stress testing, and the importance of clear policy communication. Discover how central banks navigate the complex global economic landscape and prepare for future uncertainties.
00:00 Introduction and Opening Remarks
01:50 Economic Overview and Inflation Trends
03:23 Wage Growth and Labor Market Analysis
07:21 Monetary Policy Scenarios and Risks
11:20 Bernanke Review and Policy Reforms
26:25 Technological and Data Infrastructure Upgrades
30:31 Q&A Session
41:47 Navigating Economic Uncertainty
42:07 Audience Q&A: European Economies and UK Dependency
43:00 Wage Growth and Economic Challenges
45:18 Labor Market Uncertainty and Policy Changes
46:23 Further Audience Questions: Inflation and Communication
47:56 Bernanke Review and Scenario Analysis
55:59 Ownership of Forecasts and Policy Implications
01:02:34 Panel Discussion on Inflation Dynamics
01:20:14 UK vs US Labor Market Dynamics
01:21:43 Phillips Curve and Policy Implications
01:21:59 Monetary Policy and Markups
01:23:53 Inflation Decay and Policy Credibility
01:24:41 Conflictual Inflation and Fiscal Policy
01:26:08 Monetary Policy Challenges and Future Risks
01:29:03 Inflation Expectations and Policy Responses
01:32:26 Trade Wars and Monetary Policy
01:36:16 Long-Term Inflation Scenarios
01:41:05 Panel Discussion on Inflation Dynamics
02:09:45 Understanding Wage Resistance and Inflation
02:12:12 The Complexity of Inflation Indicators
02:12:50 Labor Market Slack and Inflation Expectations
02:13:15 Challenges in Measuring Inflation Expectations
02:14:25 The Role of Models in Economic Forecasting
02:18:49 Impact of Fiscal Policies on Inflation
02:19:35 Global Trade and Tariff Implications
02:23:33 Household Savings and Economic Behavior
02:25:38 Monetary Policy and Long-Term Interest Rates
02:26:35 Unanchoring and Re-Anchoring Inflation Expectations
02:32:46 Systemically Important Prices and Policy Responses
02:34:42 Panel Discussion on Liquidity Risk in the Financial System
02:58:10 Exploring Alternative Investments and Hidden Risks
02:59:20 The Rise of Leverage in Pension Funds
03:00:39 Concerns About Subscription Lines and Leverage
03:04:32 Liquidity in the U.S. Treasury Market
03:07:14 Impact of Deficits and Regulation on Liquidity
03:12:15 Role of Banks and Principal Trading Firms
03:21:13 Central Clearing and Market Liquidity
03:24:28 Holistic Approach to Liquidity Risk Management
03:44:13 Audience Questions and Expert Responses
03:46:43 Solvency Issues at Silicon Valley Bank
03:47:38 The Puzzle of Bank Reserves
03:49:34 Liquidity and Bank Capital Allocation
03:52:13 Stablecoins and Financial Stability
03:53:35 Private Equity and Liquidity Challenges
03:58:54 Public Debt and Financial Stability in Europe
04:05:06 Forecasting and Scenario Analysis
04:40:52 Understanding Model Limitations
04:41:41 Evaluating Model Performance
04:42:42 Policy Implications of Shocks
04:43:54 Improving Economic Models
04:45:06 Communication Strategies for Central Banks
04:48:04 The Role of Scenarios in Forecasting
04:50:16 Challenges in Forecasting and Policy
04:51:27 Panel Discussion and Audience Q&A
05:22:11 Understanding the Bank's Reaction Function
05:22:22 Scenario Analysis and Mean Inflation Forecast
05:22:52 Inconsistencies in Monetary and Fiscal Policy
05:23:36 Communicating Reaction Functions
05:26:12 Attaching Probabilities to Scenarios
05:27:12 Challenges in Scenario Analysis
05:29:03 Forecasting Fiscal Policy Expectations
05:30:11 Different Approaches to Scenario Analysis
05:32:17 Non-Monetary Policy Report Meetings
05:33:46 Internal vs. External Scenarios
05:34:47 Policy Coordination and Inflation Control
05:43:39 Introduction of Philip Lane
05:46:43 Incorporating Uncertainty in ECB Policy
06:07:54 Introduction to Forecast Errors and ECB Staff Surveys
06:08:59 Model-Based Risk Analysis and Macro-at-Risk Approaches
06:13:14 Scenario Analysis and Governing Council Communication
06:16:36 Impact of Consumer Confidence on GDP and Inflation
06:18:41 Alternative Monetary Policy Paths and Gradualism
06:24:36 Communication Strategies and Simplicity in ECB Messaging
06:28:14 Audience Q&A: Inflation, Supply Shocks, and Monetary Policy