Osborne consolidates Bank of England's bank supervision role
As we suggested in yesterday's note, Chancellor George Osborne unveiled plans yesterday to centralise financial regulation further at the Bank of England and reinforce its own powers to protect taxpayers from having to bail-out failing banks in the future. Osborne proposed that the Prudential Regulation Authority (PRA) should be made an integral part of the Bank, renamed the Prudential Regulation Committee (PRC), whilst still retaining the PRA's freedom to make rules, policies and supervisory decisions. The government is also looking for the power to re-define the role of the Bank of England's deputy governors and other top officials without having to get detailed parliamentary approval.
Treasury to cut Bank of England monetary policy committee meetings from 12 to eight

If you've been getting fed up with months of MPC updates with no change – and let's face it, after six years of the same update, who isn't – then there's some good news. The number of monetary policy committee meetings is about to be reduced to just eight per year, down from 12.

This is just one of many areas that chancellor George Osborne is planning to change as part of sweeping reforms outlined in the Bank of England bill, and which is now expected to be put to parliament this Autumn.

Other key areas of reform include opening the Bank's accounts to independent public-spending watchdog the National Audit Office "improving transparency and accountability for its resources".

There's also a drive to make the BoE's court of directors "a smaller, more focused unitary board", bringing the Prudential Regulation Authority withing the central bank and establishing a new prudential regulation committee.

And Osborne wants to place a new deputy governor for banking and markets in legislation, adding the position to the court of directors and financial policy committee.

"The Bank of England has been granted vast new powers on monetary and particularly financial policy. It is crucial, therefore, that the Bank be required to explain fully its actions and decisions, which have such a profound effect on millions of people, "Andrew Tyrie MP, chairman of the Treasury Committee, said.

"The reforms announced by the Bank last December were a big step in the right direction, implementing many of the Committee’s recommendations. And the chancellor’s announcement that the government will bring forward a Bank of England bill this autumn, to provide statutory support for the proposals, is also welcome."

Osborne commented: "Ensuring the Bank is well positioned to fulfil its vital role of overseeing monetary policy and financial stability is a key part of the government’s long term economic plan."

"The measures in the Bank of England bill will ensure that the Bank is on the best possible footing to oversee its expanded remit, delivering governor Carney’s ‘One Mission, One Bank’ strategy, and take further steps to protect tax payers from firm failure."

"Bringing the Bank of England for the first time within the purview of the National Audit Office is an important reform and will improve transparency and accountability."