Bank of England Governor Mark Carney is set to face tough questions from MPs on Tuesday regarding his plans to modernise the central bank's governance, amid an escalating foreign exchange scandal. The Treasury Select Committee will press Carney and Paul Fisher, the Bank's executive director of markets, on why it took so long to act after allegations emerged in October against two officials.
Committee chairman Andrew Tyrie has stated that the Bank needs "a board worthy of the name," describing the current governance structure as "byzantine." Member Andrew Love said they will ask Carney what steps he is taking to bring management and committee structures up to 21st-century standards.
The grilling follows the Bank's suspension of an unnamed official last week and the publication of minutes from the chief dealers' sub-group of its foreign exchange standing committee, dating back to 2005. The minutes revealed that meetings were initially held at top City restaurants, and the issue of fixing was first raised in July 2006.
The Bank has appointed law firm Travers Smith to prepare a report for its oversight committee, which will be made public. Reports suggest the inquiry may involve a senior independent figure from the judiciary, the City, or academia. Mark Garnier, another Treasury committee member, warned that perceptions of the Bank being soft on problems could damage London's financial reputation and weaken Britain's hand in EU financial reform talks.
Former Chancellor Alistair Darling criticised the Bank's governing court in 2011 as "not fit for purpose," likening the governor to a "Sun King" around which the court revolves. John van Reenen of the London School of Economics expressed hope that Carney, who is less reverent of venerable institutions, would push for greater transparency and internal supervision.
