Speech by Paul Tucker to the National Association of Pension Funds

In a keynote speech today to the National Association of Pension Funds Annual Investment Conference in Edinburgh, Paul Tucker - Executive Director for Markets and a member of the Monetary Policy Committee - discusses the Bank's commitment to dialogue with financial market participants, domestically and internationally, as an input into its core monetary policy and financial stability mission.
Published on 19 March 2004

On the monetary policy side, he says information from financial markets can be used "as a diagnostic of expectations of economic prospects and of the path of policy," but he stresses that frictions in markets can distort the messages from asset prices and real-world intelligence is required to identify that. On the financial stability side, the Bank is "on the look out for symptoms of actual or incipient stress", and in the event of a crisis would need to comprehend the instruments and structures involved. He says the Bank therefore needs to understand how global financial markets and the key players in them fit together. A wide range of contacts - in the 'core' markets in which the Bank operates but going beyond that - is therefore vital.

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