Speaking at a Treasury select committee this afternoon, MPs grilled City minister Lord Myners over inequalities between the new regulatory powers of the Bank of England and the FSA.
The committee began by criticising Myners in the wake of BoE governor Mervyn King’s admission last week that he had not seen a draft of the white paper.
Myners defended the tripartite’s structure, and assured MPs that the Bank’s concerns had been addressed in the paper. But he later admitted that the governor had yet to see the impact assessment that has been published alongside the white paper.
The committee also questioned the potency of the proposed Financial Stability Council, which will be presided over by the Treasury, the Bank of England and the FSA.
Conservative MP for Altrincham and Sale West Graham Brady asked Myners whether the Bank’s role on the council was merely to air its concerns on macro-economic stability.
Myners said that the Bank’s role in the council was to just relay information, so by stating its concerns it would have fulfilled its duties.
But Myners then admitted that further Parliamentary debate may allow the Bank more powers.
The MPs reacted unfavourably to this.
Liberal Democrat MP for South East Cornwall Colin Breed said: “This is all pretty underwhelming. It seems that we now have more committees, boards and meetings than we do banks to regulate. There is very little action in this paper.”
Myners defended the paper. He said: “This paper significantly strengthens the regulatory powers of the FSA, the Bank of England and the Treasury.”
Conservative MP for Chichester Andrew Tyrie said: “Much less has changed than we would have hoped. It just seems that you have rearranged the three key deck chairs on the Titanic.”
Committee chairman and Labour MP for West Dunbartonshire John McFall asked Myners: “Have you just reduced the Bank of England to the position of a chorus in a Greek Tragedy?”
Myners replied: “I assure you, the Bank remains a main player.”