By Jonathan Davies
The Bank of England wasn't aware of the impending financial crisis a month before it started, minutes have revealed.
The Bank published minutes from its Court, the equivalent of a board meeting, between 2007 and 2009 following pressure from the Treasury Select Committee.
The minutes show that liquidity was identified as a threat, but no action was taken.
The Bank of England also used code names for banks that were considered to be in trouble. The Royal Bank of Scotland (RBS) was known as "Phoenix" and Lloyds TSB was known as "Lark".
Andrew Tyrie MP, the chairman of the Treasury Select Committee, criticised some of the Bank's non-executive directors. He said they failed to challenge senior figures like the then governor, Mervyn (now Lord) King.
"The minutes show that during the crisis the Bank of England did not have a board worthy of the name. This mattered. And it still matters," said Mr Tyrie.
Less than a month before what many consider to be the start of the financial crisis - BNP Paribas' admission over exposure to sub-prime mortgages - the Court was discussing staff pensions, open days and new members of the Monetary Policy Committee. Court members were told that the Bank was working on a new system to detect financial trouble, but there was little, if any, suggestion that there was imminent danger.
Six weeks later, despite many financial markets being in disarray, the Court members were told to have confidence in the Bank of England, the Treasury and the then Financial Services Authority (FSA).
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