Anatomy of a bungled bank job

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The Independent Online
The Government's overhauling of financial regulation was widely applauded but serious questions are now being asked about the handling of the move to strip the Bank of England of its supervisory powers. Our timetable shows how the cock-up occurred.

January 1997. Gordon Brown and Tony Blair discuss with Eddie George plans to offer Bank operational independence. Removal of supervisory role is raised but George is assured nothing will happen without consultation.

April 1997. Brown decides to offer Bank a package by giving it independence but taking away supervision.

2 May. Brown discusses approach with Treasury officials. Last-minute intervention by senior civil servant persuades him to drop idea of withdrawing supervision.

5 May. Brown informs George of Bank's operational independence. He says there will be no decision on supervision without consultation.

6 May. Brown announces decision at press conference but hints that supervision will be examined.

8 May. Cabinet meets to discuss Queen's Speech contents. Reform of Financial Services Act which would revamp City regulation receives low priority.

14 May. Queen's Speech leaves out reform of FSA but includes bill enabling Bank's independence.

15 May. Brown's advisers suggest regulatory reform can be accelerated by linking it to Bank legislation.

19 May. Brown tells George bank supervision will be transferred to an enlarged SIB. George and other Bank officials are enraged by what they see as a betrayal of trust.

20 May. Brown announces reform to Parliament.

21 May. George tells press he considered resigning. His remarks are used by a Brown adviser to stir up campaign against George.

22 May. City bankers offer public support for George. Pound falls on fears he will be replaced.

23 May. Government officials attempt to patch up rift.