In the wake of pressure from the Treasury Select Committee (TSC) and Joint Committee on the Draft Financial Services Bill, it said the new body, which would not include executive members of the Bank, would help to improve its accountability once it assumes greater responsibilities under the new regulatory regime.
Under new powers set to legislated on this year, the Bank will be responsible for macroprudential policy and the regulation of systemically important financial infrastructure.
It will also be partly responsible for the operation of the Special Resolution Regime, which will provide a framework for dealing with distressed banks and building societies.
The committee would be formed of non-executive directors of the Bank and would be responsible for “assessing whether the processes employed in making policy decisions in these areas can be reasonably judged to have considered a full range of options”.
It must also take account of differing views amongst policymakers as well as challenges from “outside the Bank”.
However, the Bank said the committee would not assess policymakers’ decisions, but their processes.
Instead, it was suggested it should commission periodic reviews of policymaking performance from expert authorities outside the Bank, such as the International Monetary Fund.
The Bank has also supported the TSC’s suggestion that future governors should be appointed for eight-year terms, instead of the current system, where they can serve a maximum of two five-year terms.
