The European parliament’s economic and monetary affairs committee chair Sharon Bowles has backed the Treasury select committee in a row with the Bank of England over its accountability in the new regulatory structure.
The TSC and the bank have been locked in a battle over the reform of the bank’s court of directors.
The select committee wants the court to be radically overhauled so it functions more like a modern board. The bank wants an oversight committee set up under the court to commission external reviews.
In guidance published alongside the Financial Services Bill last week, the Government said it is considering both sets of proposal and has agreed with the bank that if it backs its oversight committee it would be expected to commission retrospective internal reviews.
Select committee chair Andrew Tyrie says even with this added measure, the bank’s plan does not go far enough.
Speaking to Money Marketing, Liberal Democrat MEP for the South-east, Bowles says: “I am in Andrew’s camp here. Having something substantially updated from the court is necessary. The bank is enormously powerful and that possibly merits another long hard look as Tyrie suggests.”
Tyrie says: “The bank needs a proper board, capable of satisfying the standards of governance we should expect of any institution in the 21st century.”
The court came in for heavy criticism after a poor performance by several members in front of the TSC last year. Shadow Business Secretary Chuka Umunna, who was then a member of the select committee, said the bank’s governor Mervyn King had the court “under his thumb”.