Former Monetary Policy Committee member Kate Barker has warned the Government’s regulatory reforms will hand too much power to unelected central bankers and called for the chancellor to take more responsibility for the financial system.
In a paper produced for think-tank CentreForum, Barker, who sat on the MPC for nine years, criticised the plans set out in the Financial Services Bill to make the Bank of England more powerful.
The paper says: “Most significantly, it has delegated too much to the Bank of England, which next year for the first time will have a Governor appointed for an eight-year term, into an unduly powerful unelected role.”
The paper also questioned the role of the Financial Policy Committee, which will be charged with spotting and dealing with threats to the UK financial system.
It says: “I argue that the institutional arrangements for the FPC are flawed, and retain much of what proved to be a weakness of the regime introduced in 1997; the belief that responsibilities can be neatly divided up.”