Chancellor Alistair Darling wants to bring in an oversight panel of eminent City insiders to the Bank of England (BoF) under plans to overhaul the central bank, making financial stability a key function of its operations.
In return for supporting the appointment of Charles Bean, who is the choice of Mervyn King, the BoE governor, for the deputy governor role, the chancellor will demand the bank accepts more external advice on City issues and formal oversight of its decisions on financial stability, the Financial Times reports.
This will feed in to both the governor and Sir John Gieve, the deputy governor for financial stability, and it represents a significant change from the Treasury’s initial reform plans in Januray for the Bank’s role in financial stability.
Darling told the Commons yesterday: ‘we should learn from the example of the monetary policy committee’, where outside experts were drawn in to help in making interest rate decisions.
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