Committee launches inquiry into the accountability of the Bank of England

07 March 2011

On 3 February 2011 the Treasury Committee reported on the Government’s proposals for Financial Regulation. It commended the Bank of England’s engagement with Parliament over the MPC. The Government’s proposals would extend the responsibilities of the Bank to include monitoring financial stability and taking action against threats to that stability. The prudential regulator, the Prudential Regulation Authority, will be a subsidiary of the Bank of England

The Government’s own consultation notes:

“These changes to give the Bank control of macro-prudential regulation and oversight of micro-prudential regulation will mean a much greater and more operational role for the Bank in the financial system. This will have significant implications for the Bank in terms of its staff, resources, governance and transparency.”

The Committee is accordingly launching an inquiry into the Bank of England, to give this issue the attention it deserves. Key questions will be:

  • What kind of decisions should made by each body within the Bank?Discussion focuses on the MPC and FPC but are there other policy functions within the Bank’s remit which deserve attention?
  • To whom should the Bank be accountable?Are different accountability mechanisms needed for different functions?
  • Are the responsibilities  of the Court of the Bank of England clear and appropriate?
  • Are the members of the Court of the Bank  and the arrangements for its members’ appointment and dismissal appropriate?
  • What resources does the Bank of England need to carry out its functions?

Notes on submission of written evidence:

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