The Government’s proposals to improve the governance of the Bank of England do not go far enough to address the committee’s concerns about its lack of accountability, according to Treasury select committee chairman Andrew Tyrie
The Bank wants an oversight committee set up under its Court of Directors to scrutinise its work on financial stability.
In guidance on the Financial Services Bill, published last week, the Government says if the oversight committee is established, it must be able to commission “retrospective internal reviews” from Bank policymakers on policy decisions and performance alongside the external reviews proposed by the Bank.
However, the TSC is calling for the Court of Directors to be radically overhauled so it acts as a proper board.
In a short report rushed out ahead of publication of the Financial Services Bill, the committee said the Government’s proposal do not go far enough.
The TSC says the Bank will be a “super-regulator” and its accountability mechanisms need to be updated because of its new wider remit.
The Government says it will consider both the TSC’s and the Bank’s proposals.
Tyrie says: “The Bank needs a proper board capable of satisfying the standards of governance we should expect of any institution in the 21st century.”