Empower the Bank of England to tackle City, says expert

5 July 2012

The Bank of England needs to be given sufficient power to tackle the City of London.

This is according to financial historian Professor Niall Ferguson, who remarked the institution needs to be all-powerful and also have some discretionary abilities to encourage discipline.

Speaking on BBC's HARDtalk programme, he remarked legislation introduced by Labour had left the Bank impotent.

"The tri-partite system that Gordon Brown introduced when he was chancellor has been a failure," Professor Ferguson observed.

He added the current system - which sees power divided between the Bank of England, a financial regulator and other smaller regulators - is not working.

The expert, who is a professor at Harvard University, feels the reputation of the City is at stake and so the right action has to be taken.

In the past, the governor of the Bank was able to revoke the licence of any lender that acted outside of the rules.

By Tony Aynsley

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