It suggested a single indicator for financial stability was found which could be closely watched, similar to the inflation rate, to judge the committee’s success.

It also suggested the committee’s approach to macro-prudential regulation was governed by a preference for simplicity, the need for transparency, an element of predictability, proportionality and international co-ordination.

The Financial Policy Committee is part of the Bank of England and will form part of the new tri-partite regulation system with the Prudential Regulation Authority and Financial Conduct Authority next year.

Paul Chisnall, executive director of the BBA, said: “The FPC will be publishing quarterly reports which will be watched closely. But while its equivalent on the monetary side, the Monetary Policy Committee, reports on a single, specific indication for monetary policy (the inflation rate) there is no similar, single indicator for financial stability.

He added: “The FPC will therefore be expected to exercise a greater degree of judgement when identifying possible threats to financial stability. As such it will have a greater responsibility to explain any actions it considers necessary to prevent threats materialising.”

The comments follow an interim FPC meeting earlier this month where members discussed how it could be given powers to dictate capital and leverage requirements for banks, building societies and insurers.