BANK of England governor Mervyn King faces a tough grilling in front of MPs tomorrow after the man who is set to be his new deputy criticised the Bank for being slow in “fessing up” to mistakes made ahead of the financial crisis.
Financial Services Authority chief executive Hector Sants told lawmakers the Bank had admitted to errors but in a “more elaborate and lengthy process” than the FSA has. “The FSA had a cleaner, more straight forward approach to fessing up,” Sants said.
The UK is scrapping the FSA and handing many of its supervisory powers to a new prudential regulatory authority at the Bank, headed by Sants. Some were surprised that Sants criticised the Bank’s handling of the crisis ahead of his shift to his new role. “The level of communication, the level of interest in the central bank on financial stability issues, I think, was recognised by all to be very low in the pre-2007 period,” Sants told parliament’s treasury select committee.
Sants said the FSA was limiting the amount of new work it was taking on.
“Hector Sants was revealing and helpful,” said committee chairman Andrew Tyrie.