Investigation to be launched into Bank of England actions

Sir Mervyn King is to come under increased scrutiny after an
independent review was announced into the Bank of England's actions at
the height of the financial crisis.

The move, announced by the bank's non-executive arm, comes after the governor admitted he and his colleagues were "late to the game" in tackling the banking collapse.

The bank's forecasting record will also be considered under one of three reviews, while ongoing plans for providing support to the banking sector will form another.

The Court of the Bank of England, which manages the affairs of the bank but does not deal in monetary policy, will conduct the reviews before a major overhaul of financial regulation sees more power transferred to the bank.

Ian Plenderleith, chairman of investment company BH Macro and a former Bank of England official, will look at the supply of emergency cash to the banks in 2008/09.

Meanwhile, Bill Winters, who sat on the Independent Commission on Banking, will review current plans for supporting the banking system, while the former statistics chief at the US Federal Reserve, David Stockton, will probe the Monetary Policy Committee's forecasting methods.

PA