Sarah Jane Leake | Bloomberg Law Accountability of the Bank of England – House of Commons Treasury Select Committee Twenty-first Report of Session 2010-12 Volume 1: Report, together with formal minutes, oral and written evidence, 19 October 2011 Over the next few years, the existing tripartite system of financial regulation, comprising the Bank of England (BoE), HM Treasury, and the Financial Services Authority will be replaced by a twin peaks model of regulation, giving the BoE, and its new subsidiaries, the Financial Policy Committee (FPC) and the Prudential Regulation Authority (PRA), responsibility for monitoring and maintaining financial stability. The Government's proposed changes to the UK's financial regulatory architecture are set out in the draft Financial Services Bill,1 currently undergoing pre-legislative Parliamentary scrutiny. Given the impending expansion of the BoE's powers and responsibilities, the range of policy decisions for which it will be held accountable will similarly increase. In the current climate, the substantial reforms to the country's financial regulatory architecture provide a rare opportunity to readdress the balance of relations between the BoE, the Government and Parliament, which have developed on a piecemeal basis over the past 20 years. To this end, the House of Commons Treasury Select Committee (Committee) earlier this year launched an inquiry into the accountability of the BoE.2 On 8 November, the Committee made its much anticipated report (Report) publicly available. The Committee argues that certain aspects of the BoE's governance remain antiquated and unnecessarily entrenched in tradition. In its view, the bank's governance must be strengthened, and its accountability increased, to reflect its wider powers under the new regulatory regime, and to meet the needs of a 21st century democracy. The Committee makes a number of recommendations for improvement in this regard, the most important of which are outlined below.
The Court of the Bank of England
The Chancellor of the Exchequer
The Governor of the Bank of England
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