Bank of England: Will we now get only the news that's fit to print

Report on banks' capital positions was omitted as "confidence in banks – and financial stability – could be adversely affected"

Bank of England’s financial policy committee appears to have adopted an extremely low bar for omitting passages from its minutes. Photograph Olivia Harris/Reuters

The Bank of England is committed to clear, transparent and timely communications, right? Only up to a point.

It turns out that the minutes of last November's financial policy committeewere not the full deal. A passage on banks' capital positions was omitted because "confidence in UK banks – and hence financial stability – could be adversely affected". Only now has it been deemed safe to publish.

The supposedly electric words detailed members' thoughts on how individual banks could address capital shortfalls. So "one major bank" (almost certainly Barclays) had been talking to regulators about issuing more contingent capital.

And there was a debate about options for "the two major banks in which there was a significant public stake" (no prizes for guessing who).

Would investors have panicked if these weighty reflections had been published at the time – in other words, before the banks had had a chance to address their capital shortfalls?

There is no way of knowing for sure, of course. But it seems unlikely given that the Bank's wish to see higher capital levels was hardly a secret in November last year.

Lord King, governor at the time, had said in a speech the previous month that "just as in 2008, there is a deep reluctance to admit the extent of the under-capitalisation of the banking system in many parts of the industrialised world".

The point is that the FPC appears to have adopted an extremely low bar for omitting passages from its minutes, thus creating a credibility problem for itself. From now on, investors will understandably wonder if they are being given only the sanitised version of the FPC's assessment of financial risks. In a proper crisis, that might create the very panic the Bank would be hoping to avoid.

Indeed, investors will now ask if the latest minutes contain the whole story. Moody's Analytics asks: "Is the FPC more concerned about the threat of a housing bubble than it is currently letting on? Is it also understating the potential impact on financial markets of problems emanating from the US or eurozone?" Fair questions.

Being generous to the Bank one might say there is an inherent problem in giving one institution responsibility for both monetary policy and financial stability. It would not do, for example, to have one committee shouting loudly about capital shortfalls in the banking system while the other is desperately trying to avoid a fresh dip in the economy.

But that inherent challenge has to be managed skilfully. The November 2012 omission has created a credibility problem. The first question will now always be: what aren't we being told?