Labour Shadow Treasury financial secretary Chris Leslie says the Government must broaden the financial policy committee’s membership to include small firms and consumers if it wants the body to fully understand emerging economic risks.
Under the Government’s current proposals, the FPC will sit within the Bank of England and be responsible for taking action against threats to the stability of the UK’s financial system.
The FPC’s 10 voting members will include the Bank of England governor, deputy governors for financial stability and monetary policy, executive directors for financial stability and markets, the chief executive of the Prudential Regulation Authority, the chairman of the Financial Conduct Authority and four external members.
Leslie says: “Having lots of people from the same bandwidth is a mistake, the whole point is to have a body which is horizon scanning.
“For the FPC to have its finger on the pulse, it has to reflect the broader economy, large and small firms and particularly consumers.”
The interim FPC is working with the Government to decide on the tools it needs to meet its objective, which could include loan to value caps.