history the bank of england operated as an agent of government. in the subsequent 20 years, its degree of policy discretion has been transformed. it now comprises monetary, macro - prudential and micro - prudential policy – a “ 3m ” regime. the bank ’ s span of responsibilities may well be unique, at least among advanced economy central banks. though there are differences in detail, there are also striking elements of institutional similarity in the decision - making architecture for monetary, macro - prudential and microprudential policy, as carried out by the mpc, fpc and pra respectively. let me mention four features in particular : ( a ) goal dependence : the policy objectives of all three policy committees are set in statute by parliament, reflecting the attitudes of the electorate at large. in the language of economics, the 3m regime thus exhibits “ goal - dependence ”. 41 though different in detail, these objectives share some similarities. for example, the mpc and fpc have a unique primary objective, augmented with a common secondary objective. 42 ( b ) instrument independence : the policy instruments of the three policy committees are delegated, through statute, to them. in other words, the settings of these instruments on a day - to - day basis are for the bank of england ’ s policy committees, subject to meeting the parliamentary - set target. the 3m regime thus exhibits “ instrument - independence ”. ( c ) committee - based decision - making : decisions on monetary, macro - prudential and microprudential policy rest with three committees, rather than any one individual. 43 the committees themselves vary in size from 9 to 11 people. they comprise a mix of bank of england “ internals ” and “ external ” experts. decisions are made either by majority voting ( mpc ), consensus ( pra ) or by consensus with a provision for majority voting ( fpc ). ( d ) transparency and accountability : the deliberations and decisions of each committee are subject to public scrutiny. the minutes of mpc and fpc policy meetings are published. all three committees produce periodic reports, tabled in parliament, on their actions and analysis. 44 and members of each committee appear regularly before parliamentary committees. there is individual accountability, as well as collective responsibility, for policy. these institutional features are no historical accident. each serves as a constraint on the policy discretion exercised either by the bank as agent or by its principal parliament. the 3m for more on

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