Darling's Plan to Make Bank of England More Transparent; ECONOMY
Byline: By Nevill Boyd Maunsell Economics Editor
The top jobs at the Bank of England are to be advertised in future as well as vacancies for outsiders on the Bank's interest-setting monetary policy committee.
Chancellor Alistair Darling announced the new system "to inject more openness and transparency to the process" as part of a radical shake-up at the Bank, along with new powers for the Financial Services Authority, in his annual speech at the Mansion House in the City of London last night.
It will be some time before the new job ads appear. The Bank's governor, Mervyn King has just been reappointed for a second five-year term.
Mr Darling said that he will name the new deputy governor to succeed Dame Rachel Lomax this morn-ing At present there are no vacancies on the ninemember MPC.
The Chancellor also confirmed a plan to give the Bank a new "Financial Stability Committee" to run parallel to the MPC, charged with preserving the stability of Britain's financial system. He promised details and a consultation document today.
The new committee, he said, "will bring valuable, external expertise with City experience to bear on the Bank's decision-making".
A slimmed down Bank of England board, or "Court", will oversee the functions of both committees.
The FSA, Mr Darling added, will remain the sole banking supervisor, rejecting suggestions that it should share this role with the Bank in the light of its failure over Northern Rock.
Instead the Government will bring forward new legislation to giver the FSA new powers.
"No system of regulation, of course, can or should prevent the failure of each and every institution, "the Chancellor said., "But we must do everything possible to prevent problems which could pose a wider threat to stability. …