Treasury select committee chairman Andrew Tyrie has called on the Court of the Bank of England to release all documents charting its work during the financial crisis to judge whether the body is fit to scrutinise the Financial Policy Committee.
During a committee evidence session with the Court yesterday, in which several members raised concerns about the court’s ability to scrutinise the FPC, Tyrie said the documents would be used to assess the Court’s effectiveness during the crisis.
He said: “In order to assess the Court’s role we really need to see all the records of its engagement on the issue of the financial crisis. A key question for us is whether a beefed up Court or some other organisation is what is required to deal with the FPC scrutiny issue.”
Court chairman Sir David Lees said the Court would give the request “full consideration”.
Under the proposed regulatory structure the FPC will be responsible for financial stability and accountable to the Court which acts in a similar way to a non-executive board to the Bank.
Tyrie expressed surprise when Lees was unable to say how much the Bank spent on financial stability and whether it was spending more now than before the crisis
Tyrie said: “I am concerned you are not on top of these numbers at all or even have a sense of direction of them.”
He was also surprised when Court member Sir Roger Carr said no independent inquiry into the Bank’s failings during the crisis had been commissioned and that the discussions between Bank governor Mervyn King and the Court, which acted as an internal review, had only been recorded “in the broad”.
Tyrie said: “Do you think this is a crisis from which we can limit our conclusions to the broad, really?”
TSC member and Conservative MP David Ruffley raised concerns about how the Court oversaw the Bank’s financial stability objective during the crisis after Court member Sir Roger Carr said “the Bank could have shouted louder”.
He said: “You are implying there was a fault. I put it to you there is more the Bank could have done.”
Carr said: “Everyone could do a better job with hindsight but the commitment, vigour and determination with which the job was being done at the time was very high.”
Conservative MP Andrea Leadsom raised worries about the ability of the Court to deal with conflicts between the Monetary Policy Committee and the FPC when they suggest competing measures to achieve their respective targets.