Governance at the Bank of England must be strengthened to reflect its new powers, parliamentarians (MPs) on the Commons Treasury Committee have demanded in a report published this week ('Accountability of the Bank of England').
Main recommendations:
- The Court of the Bank of England should be transformed into a smaller, more expert Supervisory Board with its own staff.
- The Minister of Finance ('Chancellor') should be responsible and accountable in a period of financial turbulence where public money is at risk; in these circumstances the Chancellor should be given a temporary and limited power to direct the Bank, according to MPs.
The MPs also propose that:
- The Governor of the Bank be appointed for a single, non-renewable term of 8 years.
- A majority of external members sit on the Financial Policy Committee (FPC) and the Monetary Policy Committee (MPC).
- The new macro-prudential tools to be given to the FPC be subject to thorough parliamentary scrutiny.
