MPs yesterday called for an investigation into the Bank of England’s role in the financial crisis of 2007 and 2008.
The calls come after BoE governor Mervyn King said that the Bank could have done more to prevent the disaster.
According to The Daily Mail, Tory MP and Treasury select committee member David Ruffley believes a probe could not come soon enough.
He says: “Hard-working families and the wider British economy will suffer for some years yet from the catastrophically poor judgment and buck-passing that preceded the banking crash.
“Yet individuals who are suspected of being asleep on the job are to be given draconian and unprecedented powers this year.”
From next year the Bank of England’s new Financial Policy Committee will have the power to regulate banks.
TSC chairman Andrew Tyrie says: “The Bank is taking on considerable new powers in the Financial Services Bill, currently before Parliament. Yet we still do not have firm and agreed conclusions about the mistakes that were made and which the legislation is, presumably, seeking to address.”
TSC member and Labour MP John Mann says there should be an inquiry into the BoE’s mistakes and says it was a shame that King has ignored the proposals so far.
He says: “We need to know where the Bank failed, and why. We also need to look at his role (Mervyn King), because he was a big part of the problem.”
The TSC and the Bank recently clashed over the committee’s request for it to release minutes from BofE court meetings during the financial crisis. The bank said revealing the minutes would not allow space for private discussions in future but Tyrie said not releasing them was stopping the committee properly scrutinising the bank.
The TSC’s report on the Bank’s accountability, published last November, said it will become a “super-regulator” after the regulatory shake-up and called for the court to be replaced with a modern supervisory board.
In a BBC interview on Thursday, King said he believed the Bank’s first inquiry in 2008 was sufficient. He said: “The important thing is whether you learn the lessons. And we have done that.”