A transparent City watchdog is needed

The first thing the new financial policy committee should do when it meets in the autumn is agree to publish minutes of its proceedings, as the monetary policy committee does. Strangely, this requirement was not mentioned in today'sstatement by City minister Mark Hoban. This may have been a courtesy to the committee. But the publication of minutes is crucial for two reasons. First, we need to be convinced that the Bank will do a better job than the Financial Services Authority in spotting dangers in the financial system. It is quite easy to accept that the Bank can more effectively persuade errant bankers, once they have been identified, to change their ways. The position of the governor carries enormous clout. The harder part is to believe the Bank would have spotted a major crisis-in-the-making any sooner. Yes, it may well have stamped on Northern Rock's 125% mortgages given half a chance – but hindsight is a terrible guide to the wider story. So let's hear the committee's debate, the points of disagreement, the measurements of risk taken and the policy responses considered. Second, the minutes would serve a practical purpose in concentrating the minds of individual banks' risk committees. If the FPC is fretting about loan-to-value ratios, that's a cue for a risk committee to dig deeper into the books it is meant to be overseeing. All the signs suggest the FPC will indeed publish minutes – but let's have the confirmation.