The Only Game in Town?
A New Constitution for Monetary
(and Credit) Policy

Myron Scholes Global Markets Forum

May 22, 2014, 6–7:30 P.M.

The Initiative on Global Markets proudly presented a talk in the Myron Scholes Global Markets Forum by Sir Paul Tucker, senior fellow at the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School. Sir Paul Tucker was deputy governor of the Bank of England for Financial Stability from 2009 to October 2013. Internationally, he was a member of the steering committee of the G20 Financial Stability Board and a member of the board of directors of the Bank for International Settlements.

Central banks have accumulated more powers and extended the scope of their operations during and since the crisis. This poses serious questions about their independence and mandate. In his talk, Tucker sets out a framework for allocating powers to an independent but accountable central bank. He addresses whether, in the so-called new normal, central banks should seek to operate directly on shorter- and longer-term interest rates and on the cost of private-sector credit, and discusses how macroprudential powers affect that debate. Finally, he addresses how monetary policy regimes need to adjust to what has been learned from the crisis.

The Myron Scholes Global Markets Forum is part of the Initiative on Global Markets (IGM) and is generously sponsored by Myron Scholes.

Read the Text »

See Companion Paper: The Lender of Last Resort and Modern Central Banking »

Speaker Profiles


Paul Tucker is a senior fellow at the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School and at Harvard Business School. He was deputy governor at the Bank of England from 2009 to October 2013, having joined the Bank in 1980. He was a member of the Bank of England’s Monetary Policy Committee, Financial Policy Committee (vice chair), Prudential Regulatory Authority Board (vice chair), and Court of Directors. Internationally, he was a member of the steering committee of the G20 Financial Stability Board, and chaired its Committee on the Resolution of Cross-Border Banks in order to solve the too big to fail problem. He was a member of the board of directors of the Bank for International Settlements, and was chair of the Basel Committee for Payment and Settlement Systems from April 2012.

During his 30 years at the Bank of England, he ran the areas responsible for monetary policy strategy, market operations, and financial stability, as well as working as a bank supervisor. He had secondments to an investment bank and to Hong Kong, where he helped reform securities markets and regulation following the 1987 stock market crash.