Governance at the Bank of England too weak, report finds
08/11/2011
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...crisis, lines of accountability must be much sharper," Andrew Tyrie MP added.
"The Chancellor should have a specific power of direction when public money is at risk. This will place the Chancellor firmly in charge during a crisis and accountable to Parliament for decisions."
The report also recommends that:
* The Governor of the Bank should be appointed for a single, non-renewable term of 8 years. And his or her appointment and dismissal should be subject to a statutory veto by the Treasury Select Committee. The report also argues that the Financial Policy Committee and the Monetary Policy Committee should have a majority of external members.
* There will need to be thorough parliamentary scrutiny of the new macro-prudential tools to be given to the FPC at the time of their introduction. The orders in which they are set out should be provided to the Treasury Committee for comment two months before they are laid before Parliament. They should normally be debated on the floor of the House without a 90 time limit.
* The Treasury should give guidance to the FPC that it adopt published indicators for defining and gauging financial stability. These should be updated at regular intervals.
* The Governor should have a duty to raise any conflicts between the decisions of the MPC and FPC with the Chair of the new Supervisory Board.
* The Chairman or another member of the Supervisory Board should be an observer at meetings of the MPC and FPC. The Board should also ensure that external members of the Committees are not constrained by 'groupthink' and feel free to express their views.
* ... continued on page three >
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