Governance at the Bank of England is too weak and must be strengthened to reflect its new powers under the regulatory regime, according to the Treasury select committee.
In a report published this week, the committee argues that the BoE’s governance needs updating. It says the Chancellor should be responsible and accountable in a financial crisis where public money is at risk and should be given temporary power to direct the bank.
It says the court of the BoE, which is responsible for managing the affairs of the Bank, 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 and recommends the BoE’s governor should be appointed for a single, non-renewable term of eight years.
TSC chairman 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 shake-up of financial regulation proposed by the Government provides the opportunity to do something about it.”
Churchouse Financial Planning director Keith Churchouse says: “All areas of financial services will be touched by additional requirements following the banking crisis to make sure the problems do not occur again.”