Bank of England governor Mervyn King has told MPs he would back the creation of a new Parliamentary committee to boost the bank’s accountability.
Under proposals in the draft Financial Services Bill, the bank’s powers will be extended considerably. The Prudential Regulation Authority and the financial policy committee will be based in the bank, alongside the monetary policy committee.
TSC members have expressed concern about the bank’s workload and accountability under the new structure.
Giving evidence to the committee scrutinising the bill last week, King said accountability should be more intense. He said: “Because the responsibilities of the bank will be extended, you have to look carefully at the governance and accountability of the bank. We expect that to be increased. Whether there should be a separate committee or a sub-committee is for Parliament to decide but I would welcome that.
“It would increase the committee’s burden but I am sure you would find a way round that. I do not think it is something you can delegate, you are there representing the public to hold us to account.”
King said some of his work as BoE governor on prudential regulation and monetary and financial policy will be delegated to deputy governors, who should also face increased scrutiny.
PRA deputy chief executive designate Andrew Bailey said accountability must be stepped up from the level the FSA has operated under. But he added that the sensitivity of the information that would be discussed in the committee must be taken into account.
He said: “You may want to consider how you have a robust private process because it would concern me if the accountability mechanism was in some sense compromised by not being able to talk about the things you need to talk about.”