Speaking at this year’s British Bankers Association Conference in London, Conservative shadow financial secretary to the Treasury Mark Hoban called for the BoE to be given power to regulate the macro-economy as well as hinting at giving it more micro-economic powers.
In 1997, the Labour party took much of the Bank’s micro-regulatory powers and gave them to the newly formed FSA. Hoban said that one of the Tories’ possible options could be to return powers back to the Bank.
He said: “What can be done to promote micro-prudential regulation further up the agenda? George Osborne asked Sir James Sassoon, a former Treasury civil servant, to consider reforms for the tripartite – Sassoon has suggested that, radically, the micro-prudential responsibilities could be returned to the bank.
“We have yet to form a view as to whether any of Sassoon’s proposals should be introduced, but one thing is clear – we cannot allow ourselves to be in a situation where micro-prudential regulation is lost in the system.”
Hoban also reiterated the Tories’ call for the Bank to be given more powers: “We believe that responsibility for macro-economic prudential should lie with the Bank of England. Of course we will only find out when we finally see the long-awaited Treasury white paper.
“But we believe the Bank should act as a macro regulator as it has the analytical capability to look at financial trends. We also believe that we need an authority that possess the right authority in the market place to act as a macro prudential regulator – and only the BoE has that power right now.”