Tyrie says BoE plan fails to tackle issue of accountability

Treasury select committee chair Andrew Tyrie has slammed proposals to increase accountability within the Bank of England, saying they do not go far enough to address the committee’s concerns.

In its report into accountability at the Bank, published in November, the TSC said under the new regulatory structure the bank would become a “super-regulator”.

It called for its court, which currently acts as its board, to be radically reformed to improve its ability to hold the bank’s directors to account.

But, in a document released by the bank last week in response to the report, its governor Mervyn King and court chairman David Lees rejected the call, proposing instead that a sub-committee be set up under the court to run “periodic reviews” of the performance of the Financial Policy Committee.

The BoE’s submission suggests that because the Financial Policy Committee will be meeting at irregular intervals, particularly in times of crisis, and because its decisions will occasionally be based on internal and confidential information, it would be very difficult for an external body to carry out such reviews.

Tyrie says the TSC will publish a response to the bank’s proposal in time for the Chancellor to consider before he publishes the Financial Services Bill which will deliver the new set-up. It is likely to be critical of the bank’s proposal.

Tyrie says: “While supporting some of our recommendations, on several key points, the court of the bank falls short of what is needed.”