So, it’s happening. The Banking Reform bill to be published today will give the Treasury and the bank regulator the power to break up a bank that doesn’t respect the ringfence between retail banking and the riskier stuff. Read more
The Treasury Committee has let loose some letters between its chairman, MP Andrew Tyrie, and the former chief executive of the FSA Hector Sants. The subject matter of the correspondence concerns the original approval by the FSA of Bob Diamond appointment as CEO of Barclays back in 2010.
The freshly released content (see below) provides confirmation that the FSA caveated its approval of Diamond with a warning that it could change its mind if there was an adverse outcome from the Libor investigation. Read more
John Mann, the battler from Bassetlaw, is back with the results of his very own banking inquiry.
The Labour MP set up the alternate inquiry after expressing his displeasure at the omission of fellow committee member Andrea Leadsom and his good self from the specialist Libor inquiry because they were “too outspoken”. The words “whitewash” and “farce” also made an appearance: Read more
So says John Mann, the fiery MP for Bassetlaw who’s been hurling the invective at Barclays and Bob Diamond of late.
He’s now fuming that he and fellow member of the awkward squad Andrea Leadsom have reportedly been left off the grand British parliamentary Banking Enquiry being led by treasury select committee head Andrew Tyrie. Read more
An influential group of MPs has demanded a more robust debate over plans to force Britain’s banks to protect their core UK retail operations, so that radical changes were not agreed behind closed doors. Responding to proposals from a commission led by Sir John Vickers, the Treasury select committee called for greater detail on how its central idea of ringfencing customer loans and deposits would work in practice. “The full arguments for, and all the major criticisms of, ringfencing need to be on view,” Andrew Tyrie, who chairs the Treasury committee, told the FT. “It is the public who pays for banks’ and regulators’ mistakes.” Mr Tyrie expressed concern that the evidence on which the independent commission on banking’s recommendations had been based – and the banks’ criticisms of those proposals – had not been properly aired.
Corporate governance at the Bank of England is coming under scrutiny from bankers and politicians concerned that its court of non-executive directors is not strong enough to hold its executives to account for the central bank’s greatly expanded functions, reports the FT. They warn that the court – which was traditionally more of a sounding board than a corporate board – may not have the expertise or authority to challenge senior Bank officials as they extend their responsibilities beyond monetary policy into broader financial regulation. “Everybody agrees that accountability is a serious issue,” said Andrew Tyrie MP, chairman of the Treasury select committee, who has been holding parliamentary hearings on the Bank’s corporate governance that resume on Monday.
Divisions within the Bank of England over Mervyn King’s “excessively political” support for the coalition government’s fiscal austerity programme were laid bare during parliamentary questioning on Thursday, the FT reports. Adam Posen, an economist who sits on the Bank’s rate-setting monetary policy committee, confirmed that several members – “more than just me and fewer than a majority” – had not wanted an important report to endorse the rapid and sweeping fiscal retrenchment shortly after the election. His comments at the parliamentary hearing on Thursday confirmed a Financial Times report this month revealing concern among some senior Bank officials including MPC members about Mr King’s endorsement of the coalition’s austerity plans. Asked about the FT report at a press briefing, Mr King had brushed away the question as not “serious”. Andrew Tyrie, chairman of the Treasury Select committee, grilled the governor about the worrying perception that the Bank’s independence had been compromised. Speaking after the hearing, Mr Tyrie said: “This is a very significant day in the history of the Bank of England’s independence.
Andrew Tyrie, the chairman of the Treasury select committee, has warned that the government might be creating policy “on the hoof” in its attempts to improve financial regulation, the FT says. In his first interview since taking up the post, he said the committee of 13 would take a close interest in George Osborne’s plans to dismantle the FSA and transfer many of its powers to the Bank of England.