Critics say Bank probe too limited
AN investigation into the Bank of England’s performance in the financial crisis will be too limited in scope and has come too late to influence a massive shake-up of financial regulation, prominent MPs said yesterday.
The Bank announced three new reviews covering its emergency support to RBS and Lloyds, the liquidity it provided to the banking system as a whole, and the MPC’s forecasting capabilities.
Treasury Select Committee chairman Andrew Tyrie said this represents an important step in the Bank’s recognition that it needs to become more accountable, but said the reviews do not go far enough.
“What is needed is a comprehensive review by the Bank of its performance through the course of the crisis,” he said.
“That review should have been done much earlier, before the euro crisis deepened.”
Had that happened, Tyrie believes, the results could have been used to inform the legislation currently going through parliament to reform financial regulation – an opportunity that has been missed.
His colleague on the select committee, David Ruffley, said he was worried about the appointment of former senior Bank staff members Ian Plenderleith and David Stockton to lead two of the reviews.
“Whilst not impugning their integrity, there is the suspicion that they subscribe to the ‘group think’ among Bank of England executives that contributed to the financial crash in the first place,” Ruffley told City A.M.