External Member - Financial Policy Committee
Date Posted: 01/11/2019
Closing Date: 26/01/2020
The Financial Policy Committee (FPC)
The FPC was established as a committee of the Bank by the Financial Services Act 2012.
The membership of the FPC comprises the Governor (who chairs the FPC), the four Deputy Governors, the Chief Executive of the Financial Conduct Authority, the Bank’s Executive Director for Financial Stability Strategy and Risk, five external members appointed by the Chancellor, and a non-voting member from HM Treasury (see Appendix II in the Role Description document for bios of the FPC members).
The FPC exercises its functions with a view to contributing to the achievement of the Bank’s financial stability objective. The FPC is responsible for identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The FPC also has a secondary objective to support the Government’s economic policies.
The FPC has wide-ranging powers of recommendation and can direct the Prudential Regulation Authority and the Financial Conduct Authority to take action to address systemic risks to financial stability.
The appointment of external members to the FPC is designed to ensure that the Committee benefits from thinking and expertise in addition to that existing inside the Bank of England and to provide constructive challenge during the Committee’s deliberations. Each member of the FPC should have expertise in the field of financial services and economics. External members will be independent – they will not represent or lobby for individual groups, interests or sectors.
The FPC has responsibility for formulating macroprudential policy. As set out in the Bank of England Act 1998, as amended by the Financial Services Act 2012, the objectives of the FPC are:
to contribute to the achievement by the Bank of its financial stability objective by identifying, monitoring and addressing systemic risks with a view to protecting and enhancing the resilience of the UK financial system; and subject to that
to support the economic policy of Her Majesty’s Government, including its objectives for growth and employment.
The FPC meets quarterly for a series of meetings (usually held in March, June, September and November). The Committee aims to set policy by consensus, but will vote if a consensus cannot be reached. In advance of policy meetings, the FPC receives extensive briefing on the economy and the financial system from Bank of England and Financial Conduct Authority (FCA) staff. This includes briefing and issues meetings which usually take place in the two weeks before the FPC’s policy setting meeting. The members of the Committee are made aware of all the latest data and hear explanations of recent trends and analysis of relevant issues. The Committee is also told about the relevant regulatory issues by Bank and FCA staff.
The Financial Services Act 2012 requires the FPC to explain its thinking and decisions publicly in detail. A record of FPC meetings is normally published two weeks after policy meetings. The record gives a full account of the policy discussion, including differences of view. The record also sets out the votes, if any, of the individual members of the Committee. The Committee explains its actions regularly to parliamentary committees, particularly the Treasury Committee. FPC members are also expected to speak to audiences throughout the country, to explain the FPC’s policy decisions and thinking.
In addition to the FPC meeting records, the FPC publishes a Financial Stability Report (FSR) bi-annually. The FSR contains the FPC’s assessment of the strength and weaknesses of the UK financial system and the Committee’s outlook for the stability of the system. The report also sets out a summary of the action taken by the FPC since the previous report and an assessment of how those actions have contributed to the FPC’s objectives.
The Financial Services Act 2012 requires that the FPC publish explanations for its policy decisions and these explanations will be published in the FSR.
This is a high-profile and influential role. As set out in legislation, the Chancellor of the Exchequer will appoint an external member to the FPC only if he is satisfied that the person has knowledge or experience which is likely to be relevant to the Committee’s functions.
In making external appointments to the FPC, the Government will seek to ensure that the composition of the Committee provides an appropriate balance of different skills and backgrounds and is keen to increase the diversity on the Committee. The appointment of external members to the FPC is designed to ensure that the Committee benefits from thinking and expertise in addition to that gained inside the Bank of England.
The requirements for this role are as follows:
- Strong and proven financial sector knowledge and experience – candidates must have the technical expertise and experience necessary, particularly in banking and markets, in order to make independent macroprudential decisions. Candidates must demonstrate that they have used their financial sector expertise operating at a very senior level in business, preferably financial markets, as a leader in their profession.
- Excellent interpersonal and communication skills – candidates must be able to communicate with complete credibility in the markets and the media and be able to defend decisions under pressure. Candidates must be able to make a strong contribution to the FPC’s communications, explaining policy decisions to the public.
- Undisputed integrity and standing – the ability to maintain discretion and engender trust with a willingness to abide by the necessary conflict of interest constraints.
- A solid understanding of economics – candidates must be able to demonstrate that they can consider the economic factors in the Committee’s decision making. Candidates should demonstrate that they can apply economic knowledge in areas related to financial policy or macroeconomic issues.
- Analytical ability – candidates must have analytical ability, and the ability to absorb large amounts of complex information and reach reasoned and robust conclusions.
- Independence of thought – candidates must be able to exert influence within the Bank, FPC and in wider external policy debate and be comfortable forming personal views whilst working closely and constructively with FPC members.
- Operational risk – a strong understanding of operational risk, including cyber risk.
External members of the FPC are appointed by the Chancellor of the Exchequer. External appointments to the FPC are for a three-year term. There is the possibility of reappointment at the end of the term and external members can serve a maximum of two terms.
It is expected that the appointment will commence in time for the Q2 FPC round of meetings in May 2020.
Under the Bank of England Act 1998, a person is disqualified from being an external member of the FPC if he or she is (a) Minister of the Crown; or (b) serving in a Government department in employment in respect of which remuneration is payable out of money provided by Parliament.
External members of the FPC are appointed by the Chancellor as officer-holders at the Bank of England. The Court of the Bank sets the terms of their appointment. The contract is fixed term and non-pensionable for the term of the appointment plus a three month “purdah” period on expiry of the fixed term. It requires a part-time commitment of an average 23 days a quarter, though actual experience can vary considerably. For the period of the appointment and during the purdah period FPC members are bound by the Bank’s conflicts of interest code – which covers potential conflicts on appointment as well as subsequently – and are required to abide by the Bank’s rules on personal financial transactions as well as its general code of business ethics (“Our Code”) and guidance on external communications.
Total compensation will be £96,000 p.a. This figure will be reviewed annually by the Bank’s Remuneration Committee.
External FPC members are not required to hold UK nationality.
FPC meetings normally take place at the Bank’s head office in Threadneedle Street in the City of London.
The Bank of England
The Bank of England is the central bank of the United Kingdom; it exists to ensure monetary stability and to protect and enhance financial stability. The Bank employs around 4,300 staff and has a total gross expenditure of around £650 million per annum.
The statutory objectives of the Bank of England, which are set out in the Bank of England Act 1998, are:
Financial stability entails detecting and reducing threats to the financial system as a whole. Such threats are detected through the Bank’s surveillance, market intelligence and supervisory functions, which include the Prudential Regulation Authority. The Financial Policy Committee is responsible for contributing to the Bank’s financial stability objective by identifying and monitoring systemic threats to financial stability and taking action to reduce or remove those threats. On behalf of the Court of Directors, it determines the Bank’s Financial Stability Strategy.
Other parts of the Bank also have a role in mitigating threats to financial stability, for example by strengthening infrastructure, and by financial and other operations at home and abroad, including, in exceptional circumstances, by acting as the lender of last resort.
The Financial Services Act 2012 brought together responsibility for all aspects of financial stability within the Bank of England. The Act strengthened the Bank’s financial stability objective, created the Financial Policy Committee as a policy committee within the Bank and the Prudential Regulation Authority as a subsidiary of the Bank. The Bank of England and Financial Services Act 2016 provided for the Prudential Regulation Authority to be incorporated within the Bank and the establishment of a Prudential Regulation Committee.
Monetary stability means stable prices and confidence in the currency. Stable prices are defined by the Government’s inflation target, which the Bank seeks to meet through the decisions on interest rates and asset purchases taken by the Monetary Policy Committee, explaining those decisions transparently and implementing them effectively in the money markets.
The Bank’s policy responsibilities are conferred by legislation on expert bodies within the Bank, one of which is the Financial Policy Committee (the other expert bodies are described in Appendix I of the Role Description document).
How to Apply
The details and forms you are required to complete as part of the application are explained below, with the relevant forms listed in Appendix IV of the Role Description document. These documents are available on the Centre for Public Appointments website.
Applications must be submitted to the following email address: email@example.com
You need to provide the following information:
- Contact numbers and e-mail addresses, which will be used with discretion.
- A full CV (including education and professional qualifications, career history, and relevant achievements and responsibilities).
- The names of two referees should be included in the CV. Referees should know you in a capacity to comment on your suitability for the appointment and have authoritative and personal knowledge of your achievements. References will only be taken up for short listed candidates, but will be sought prior to the interview.
- A covering letter of no more than three sides of A4 explaining how you meet the appointment criteria as detailed in the candidate profile and summarising the evidence from your career which best demonstrates your qualifications for the appointment. If you believe you may have a potential conflict of interest please do flag this in the cover letter, as it may be explored at interview.
You will also be asked to complete a questionnaire regarding your contact details, guaranteed interview, conflicts of interest, and political activity, and a diversity monitoring form. Information submitted in the diversity monitoring form is required for monitoring purposes only and will not be seen by any selection panel. HM Treasury’s Public Appointment Recruitment Privacy Notice is available on the public appointments website. A copy of Sapphire Partners’ private policy can be found at http://www.sapphirepartners.co.uk/pdf/Privacy%20Policy%20-%20Sapphire%20Partners.pdf.
Your application will be acknowledged shortly after receipt and you will be informed by email or by telephone of the progress of your application.
Applications must arrive no later than 11pm GMT on 26 January 2020.
If you have any queries concerning your application, or technical queries on completing the application, please email Sally Springbett at firstname.lastname@example.org or call Sapphire Partners on +44 (0)20 7292 9970.
Once the closing date for applications has passed, applications will be sifted according to the candidate profile. Those applicants who have not been successful will be notified at this stage and a short list of the most qualified applicants will be invited to final panel interviews, which will be held in London.
The closing date for applications is Sunday 26 January 2020. Interviews are expected to take place in early February. It is expected that the appointment will be made during Q1 of 2020, in time for the Q2 2020 FPC round that begins in May 2020.
If you are invited for interview, reasonable and necessary travel expenses (standard class) will be reimbursed. Those invited to interview will be advised on how to claim their expenses.
Equality of Opportunity
The Bank of England and HM Treasury have strong commitments to diversity and equality of opportunity, and welcome applications from candidates irrespective of their background, gender, race, sexual orientation, religion, or age, providing they meet the required criteria. Both HM Treasury and the Bank are signatories to the Women in Finance Charter and applications from women and BAME candidates in particular are encouraged.
All disabled candidates (as defined by the Equality Act 2010) who satisfy the minimum criteria for the role will be guaranteed an interview under the Disability Confident Scheme (DCS).
To be eligible for consideration under the DCS, you must be considered disabled under the Equality Act 2010. This means that you must have or have had in the last 12 months – a physical or mental impairment which has a substantial long-term adverse effect on your ability to carry out normal day-to-day activities. This includes those whose disability has lasted, or is likely to last, for 12 months, or if the disability or condition is likely to progress or recur.
If you wish to apply under the DCS, then please complete Section 2 of the Disability Confident, Political Activity, and Conflict of Interest form included as part of this pack on the public appointments website.