Bank of England rejects calls for supervision

The Bank of England has rejected proposals from MPs for a supervisory board to strengthen governance and accountability.

In his response to the Treasury select committee's suggestion, governor Sir Mervyn King said that any such body would only serve to second-guess decisions made by policy makers.

The Financial Times reports that he accepted the need for greater accountability in certain areas, but rejected proposals for an overhaul in the way the Bank is run.

Consensus is forming among MPs that greater checks and balances may be needed, especially if it is given responsibility over supervising banks, as well as monetary policy

However, the news provider reports that Sir Mervyn and Sir David Lees, court chairman, said: "It is vital that the oversight committee does not seek to second guess the decisions of policymakers themselves.

"The passing of such judgments could threaten the relationship of trust that is necessary between policymakers and the oversight committee."

Meanwhile, it was revealed today that CPI inflation fell to 4.2 per cent in December, still well over the target level of two per cent.

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