Bank of England "antiquated", say MPs

Bank of England

The Bank of England's is in need of a dramatic overhaul to keep it up to date with 21st century needs, claim a group of MPs.

A treasury select committee has released a report today calling for changes to the structure of the Bank of England to make it more transparent in its practices.

MPs claim that now is the perfect opportunity to make the changes, following the government's proposed shakeup of financial regulation in the country.

Chairman of the committee Andrew Tyrie, says parts of the Bank's governance "appear antiquated".

More power for the chancellor

Recommendations include giving the chancellor power over the Bank during financial emergencies – although this would only be for short periods of time. Tyrie says government interference on a day-to-day basis should be avoided but in a crisis "lines of accountability must be much sharper".

"The chancellor should have a specific power of direction when public money is at risk. This will place the chancellor firmly in charge during a crisis and accountable to parliament for decisions," says Tyrie. 

Other proposed measures include that the governor of the Bank, currently Mervyn King, should only be appointed for one, non-renewable, eight-year term.

A smaller supervisory board should replace the current governing body of the Bank (known as the court). In a bid to be more transparent, the supervisory board should publish the minutes of its meetings and be open to parliamentary requests for information.

"Scrutiny of the Bank should reflect the 21st century," says Tyrie. "That means clear lines of accountability, and more information made available to parliament."

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