TSC slams Bank for avoiding financial crisis review

Andrew Tyrie MP, chairman of the TSC has revealed the contents of letters sent to him by Sir David Lees, chairman of the Court of the Bank of England, which explain why the Bank is refusing to submit to a review.

In March the Court was asked by the Committee in public evidence whether it had commissioned a review of the conduct of the Bank during the Northern Rock crisis.

The Court replied: "... it was a topic of considerable importance, but it was reviewed by the Court, rather than a specific study commissioned by the Court ... it was not necessary to call for a review. A review was done as part of normal Court business..."

The Court was also asked to provide to the Committee the minutes of the Court relating to the financial crisis.

The Court has provided a copy of document ‘Tripartite lessons from Northern Rock' which the Court sent to the Chancellor with the authority of the Court in December 2007.

The TSC has published an abridged version of this report with sections removed for reasons of “commercial sensitivity”.

The Court has refused to provide the Committee with minutes of the Court relating to the financial crisis.

This has been on the basis that it would provide no private space for deliberation, and that the Freedom of Information Act did not apply to the Bank's monetary policy and financial support operations.

Tyrie said: "I have been disappointed at the responses we received from the Court to our requests for information.

“This was the most serious financial crisis for decades and the Bank's decision making affected the economic future of the country.

“The Committee on behalf of the Parliament is not able properly to carry out its function of holding the Court of the Bank to account without access to the relevant information.

"It is unsatisfactory to say the least that the Court should be using the provisions of the Freedom of Information Act as a reason not to provide Parliament with information.

“The provisions of the FoI Act have no bearing on what Parliament may need to hold other bodies to account. I hope that the Court will feel able to reconsider our request.

"The Court's response is a reflection of the problem which the Committee's inquiry into the accountability of the Bank of England has been seeking to address.

“Our forthcoming report on accountability of the Bank will make proposals on how future cases can be more appropriately handled."