Bank of England governance must be strengthened, say MPs
Share
Governance at the Bank of England is too weak and must be strengthened to reflect its new powers under the new regulatory regime, according to MPs on the Treasury select committee.
In a report published today, called Accountability of the Bank of England, the committee argues the BoE’s governance needs updating to reflect the new regulatory environment.
The report says the court of the BoE, which is responsible for managing the affairs of the Bank other than the formulation of policy, should be transformed into a smaller, more expert supervisory board with its own staff.
It also says the court should have the power to conduct and publish retrospective reviews of BoE policies to improve accountability.
The report adds the Chancellor should be responsible and accountable in a period of financial turbulence where public money is at risk and should be given temporary power to direct the bank.
It also says the BoE’s governor should be appointed for a single, non-renewable term of eight years.
Chairman of the committee Andrew Tyrie says: “The Bank of England will play an even more vital role in preventing future crises, yet aspects of its governance appear antiquated. The radical shakeup of financial regulation proposed by the Government provides the opportunity to do something about it.”
He adds: “Scrutiny of the Bank should reflect the needs of 21st century democracy. That means clear lines of accountability, and more information made available to Parliament.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
