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MPs call for extra independents on FPC

MPs have demanded that the Bank of England add more independent voices to its Financial Policy Committee only one week ahead of its first meeting.

According to the Financial Times, the FPC is now two members short ahead of the meeting after the Treasury Select Committee accepted the appointment of Alastair Clark, a Treasury adviser and former bank official, to an interim financial policy committee, but claimed he was not independent enough to qualify as an external member.

The news follows the decision by former head of the CBI employers organisation Sir Richard Lamberts’ to withdraw his candidacy.

The FPC has been designed to work alongside the Bank of England. It is responsible for identifying and preventing potential economic bubbles.

Chaired by Mervyn King, the FPC is supposed to be staffed by bank executives and four external members.

The TSC has confirmed US regulator Donald Kohn as an external member as well as former Deutsche Bank executive Michael Cohrs.

TSC chief Andrew Tyrie says: “The FPC only has half its required complement of external members and cannot be expected to carry on indefinitely without them.”

The MPs have raised concerns that the FPC has a lack of commercial experience and have recommended the introduction of a fifth external member. Tory MP Michael Fallon labelled Alastair Clark as “the ultimate insider”.

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