Wednesday June 24, 05:19 PM
BoE lacks tools to regulate banks - King
LONDON, June 24 (Reuters) - The Bank of England should not be held responsible for any breakdown in Britain's financial stability without first being given the power to intervene, Governor Mervyn King said on Wednesday.
King's comments are the latest salvo in an ongoing war of words over how financial stability powers should be split between the Treasury, the BoE and the Financial Services Authority.
Finance minister Alistair Darling, who is keen to avoid giving too much power to one part of the tripartite framework, will present proposals for the future of financial regulation next week .
'What matters is that powers and responsibilities are aligned,' King told parliament's Treasury Committee, noting the BoE had a statutory responsibility for financial stability but little power, beyond reports and speeches, to influence events.
'What you can't do is turn around afterwards and say, 'But you had this statutory responsibility, why didn't you do something?' -- when there is actually nothing that we can actually do.'
King and Darling took their disagreements over how Britain's financial sector should be governed public last week when both addressed the financiers at a dinner in London.
The governor has also expressed concerned that banks should not be allowed to get too big while Darling has said it is a matter of judgement and there should be no arbitrary limits on size.
During the height of the financial crisis, King lamented the fact that the BoE was no longer able to rescue banks in secret -- as used to be the case. Such a power may have reduced panic on markets.
On Wednesday, he made no specific play for greater powers, saying he had 'more than enough work on my plate at present'.
But Monetary Policy Committee member Paul Fisher was more forthcoming.
'It's clear we do need more powers to control the growth of the financial sector generally,' Fisher said.
(Reporting by Matt Falloon; Editing by Andy Bruce) Keywords: BRITAIN STABILITY/KING
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
