The Bank of England “failed” the UK during the last financial crisis, a former MP tipped to head Britain’s financial watchdog has said, as he cautioned against “groupthink” at the central bank.
Andrew Tyrie, best known for his time as chair of the influential Treasury Select Committee, said it was important to encourage dissent among Bank policymakers.
“The Bank failed us when the crash came. There was groupthink. They were part of the same groupthink as everybody else.”
His criticism raises further questions over the Bank’s handling of the crisis under Lord Mervyn King, who served as governor from 2003 to 2013.
“It’s Parliament’s job above all to make sure that groupthink - ever present in any organisation - does not take root and to do everything they can to hack away at it where they see fit.”
But there is a fine balance to be struck, Mr Tyrie warned, saying that politicians must also avoid micromanaging the Bank’s process for setting monetary policy and maintaining financial stability.
“It’s also the responsibility of the Treasury committee, and Parliament generally, to give the Bank a chance - to avoid grandstanding and to accept ‘I don’t know’ as an answer, to accept subsequent detailed written explanations as a substitute for oral requests.
“All of those, I think, are reasonable things for the Bank to hope for from Parliament.”
Mr Tyrie, who is expected to apply to lead the Financial Conduct Authority - made the comments during a panel at the Bank of England’s independence conference in London.