Mr George told the committee that recruiting able young people to do banking supervisory work for the Bank was very difficult. "How on earth are we going to get people to do this lose/lose job if we have to go through this procedure every time there is a problem?"
Both Diane Abbott and Brian Sedgemore immediately questioned the Governor on what he meant by "this procedure". The Governor then said: "There is this kind of witch-hunt every time there is a problem."
Mr Sedgemore then said to Mr George: "You're accountable to Parliament," to which Mr George replied: "I know I'm accountable to Parliament."
The committee's chairman, Sir Thomas Arnold, brought order back to the meeting as Mr Sedgemore continued to accuse the Governor of being sarcastic.
At one point Mr Sedgemore told Mr George: "Maybe you should put your head on a plate."
Mr George rejected Giles Radice's accusation that both the Bank of England's press statement on the Barings report and his replies to the committee had been very complacent. "Any defence I make will be portrayed as complacent," he said.
Mr George repeatedly refused to agree with MPs' suggestions that there had been regulatory failures in the Barings collapse. He said it was "a semantic question". He then added: "I can scarcely describe it as a success."
Sir Alan Hardcastle, an independent member of the Board of Banking Supervision who had helped compile the Barings report, did however agree that the report's recommendation that the Bank of England needed to improve its supervision abroad was "a very important criticism".
Mr George energetically rejected calls for banking supervision to be removed from the Bank of England to a new agency, leaving the Bank in charge of monetary policy. He said: "I do caution you against thinking that you can achieve perfection by changing the label."
He also rejected charges by Nicholas Budgen that the Bank of England was still supervising the City through an "old boy network". The culture had changed fundamentally, he said.
Mr Budgen suggested the Bank was out of touch with fast-moving global financial markets, which helped bring about Barings' collapse. Instead of relying on the middle-aged members of the Court of the Bank of England the Governor should reply on "a decent system of market gossip".
Mr George said the gossip would be unreliable. The Bank was better off developing better relationships with overseas banking supervisors. Hedid not intend "spending money on drinking in bars around the world".Reuse content