Who judges the Bank of England?

The main facade of the Bank of England, on Threadneedle Street in the City of London, with the Royal Exchange on the right, 21/01/2009

MPs on the Treasury Select Committee have profound doubts about whether the Bank of England, with all its sweeping economic and regulatory powers, is subject to sufficient checks and balances - whether its governance is adequate.

These concerns have been sharpened by last week's disclosure that the Bank had suspended an employee, following allegations that it was aware eight years ago of suspected manipulation of the multi-trillion-dollar foreign exchange market.

The Bank denies it colluded in market-rigging.

But any day now its so-called oversight committee will confirm that the allegations of the Bank ignoring signs of market corruption will be independently investigated and evaluated by a senior external lawyer, whose work will be based on a soon-to-be-completed initial report by the solicitors Travers Smith.

Bank of England governor Mark Carney might well wish to make this announcement when grilled today by MPs.

But he can't, and won't - because that would damage the independence of the oversight committee, made up of non-executives from the Bank's court or board, and would go some way to corroborate MPs' fears that Mr Carney and his fellow executives aren't sufficiently held to account.

Also, and as a Bank director said to me, the Bank does not dare invoke its traditional secrecy when faced with such grave accusations.

I asked him whether the yet-to-be-chosen external lawyer was likely to conclude the Bank was innocent, negligent or wilfully blind to currency fixing - or even, perhaps, complicit, for all its assertions that there is no evidence that it colluded.

His answer, that he simply did not know, was not what I anticipated.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 275.

    Sir Algernon Frayed Cuffs: who are these people? They are the ones who have for 25 years used their newspapers to try to get us to leave the EU so that they can make more money unregulated, the super rich non residents (JOKE), the men whose money controls the world. They are the Salamander members of the BBC4 series but on a world scale.

  • rate this

    Comment number 274.

    And now Mr Fisher of the BOE has said that "It's not our job to go hunting for market wrongdoing"! What Rubbish!!! The BOE should have realised that Northern Rock lending 120% of purchase prices, then lending more for furniture and perhaps not taking up/ignoring references and surveys was heading for disaster. The BOE needs to be purged of such people as Fisher and "let pensioners spend" Bean.

  • rate this

    Comment number 273.

    On the very same day Mr Carney gave his 'evidence' news came that the UKs retail sales had fallen for the first time in 10 months. Our recovery is based on sharply increasing consumer spending and investment. A fall in sales will definitely not have helped. Now it has become virtually treasonable to downplay confidence, it will be interesting to see if Mr Carney can hold his nerve of independence

  • Comment number 272.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 271.

    265. mr_market

    Dear Censors, if you had any knowledge of finance or libel laws (ie your job) then you would have marked this comment for "consideration".

    I'm so glad I don't pay a single penny for your incompetence.

  • rate this

    Comment number 270.

    There is a tried and tested saying which is,

    "It will all come out in the wash",

    Roll on the election, nobody in this present government will come out "Whiter then white".

  • rate this

    Comment number 269.

    267. johnboy99

    I agree, but which government will take them on?

    Cameron and Osborne are at best "easily led"
    Milliband is financially useless, "freeze energy bills", how short term "get me a vote" is that?
    Clegg lied about Uni fees.

    No separation, no one gone to jail. Fred Goodwin got 3 letters taken off his name.

    Woeful representation of 55 million people.

  • Comment number 268.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 267.

    The election is getting closer and I'll be voting for the party that has a sensible policy for sorting out the banks.

    Osborne had better wake up before its too late....

  • Comment number 266.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 265.

    Is the BoE has engaged in the biggest robbery this country has ever witnessed.

    When the BoE accepts that the CoL is a money siphoning machine, that fractional reserve banking has been abused, that it's very own economists are amateurs at best, then we can talk about Governance.

    Who owns the BoE?

    Who ultimately gives the banks permission to create money as debt?


  • Comment number 264.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 263.

    There's a lot of people in Wasteminster, who turn a blind eye, like Nelson, when it suits them..........................................................................LMAO


  • rate this

    Comment number 262.

    The BoE was not responsible for the actions of private traders, that was and is the responsibility of the FSA who were too friendly with the Banks and the Bankers... don't point the finger at a man who was not even in the UK or had even been considered as the Governor of the BoE, look closer to home within the FSA and the Labour Party that set it up.

  • rate this

    Comment number 261.

    "What does it matter?"

    Does representation matter anywhere?

    It matters in the cumulative & opportunity costs of corruption, in our collective departure from democratic purpose, loss of a world ruled 'by & for the people', in wars & breakdowns of order, deaths horrible & untimely, lives spent in fear & greed

    Shared peace, prosperity & survival sacrificed, for place in mad crush

  • rate this

    Comment number 260.

    Mr Peston, how could he know the answer, he was NOT at the BoE when all this was going on... and this is what happens when the Labour Party interferes with everything in power and setting up useless quangos for their mates but giving them no teeth...!

  • rate this

    Comment number 259.

    What does it matter? They will all be the mates or class of people already in these positions. Rather like so called remuneration decisions, including MPs, their mates on stupid money decide their people are worth the same big sums. MPs pay a classic example. Already three times overpaid. Judged worth more by people from grossly overpaid positions. Back scratching.

  • rate this

    Comment number 258.

    Who should judge BoE, if not 'those who know'? In practice those within & those with close relations, IF 'in conscience'.

    Some will cry (therealist@236), "ill-informed" of those downtrodden (who in truth know not how & by whom).

    For conscience at all levels to be informed by 'what is thought known at all levels' AND by focus on the same 'public interest', the wise will look to Equal Partnership.

  • rate this

    Comment number 257.

    Q&A Scrutiny Award of the Year

    Tyrie: Are these external people independent?

    Carney: (quizzically) They're a law firm

    Tyrie: Yes, but are they independent

    Carney: (after long pause and raised eyebrow) Absolutely

    Tyrie: (satisfied) Moving to next question ...

  • rate this

    Comment number 256.

    Roll out the guillotine.


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