Alistair Darling seems to have back tracked on one of Labour’s much regaled flagship policies of independence for the Bank of England with the possibility of the Treasury bringing in high-profile figures to keep an eye on the Bank of England’s policing of the markets, hoping to prevent a repeat of the Northern Rock fiasco, although some may feel the Rock was actually overseen by the FSA and is perhaps where any high powered overseer would be of most benefit.
Mr Darling emphasised the belief he attaches to bolstering the Bank’s work on the City: “Part of the changes that I want to make to the Bank of England is to restructure it so that one of its core purposes is the maintenance of financial stability,” he said.
The Chancellor and the Treasury seem to in some conflict with Mr King over the new 2nd in command at the Bank, with Rachel Lomax leaving.
Mr King is keen the position should go to a leading economic expert and is believed to favour Charles Bean, his trusted chief economist. But the Governor King’s preference seems to have met some resistance from the Treasury, who might favour an appointment with more markets expertise as part of a “balanced team”.
There are indications that some form of agreement will be reached on the appointment with the Governor’s preference of Mr. Bean’s probably getting the nod, whilst the bank accepts more outside advice on financial stability. |
