ABSTRACT
This chapter considers the issue of the threat to political legitimacy of the Bank of England’s Financial Policy Committee and its employment of macroprudential policies. The concept of political legitimacy is based on the underlying ideas which sustain democratic accountability and the conventions and understandings that govern the use of power. Macroprudential policy blurs the boundaries between economics, sociology, law and politics. The chapter examines the issues posed, in particular, by the delegation of policymaking and implementation powers to public organisations. The boundary may be at the point at which macroprudential policy is directed at the individual. The chapter explores the importance of both political and operational independence and the possession of technical expertise as factors in securing and maintaining political legitimacy. However, these are insufficient since in a number of areas, such as housing, the policymaker needs to ensure high levels of both popular and emotional engagement.
