The Treasury Select Committee has called for wide-ranging reforms of the Bank of England's "antiquated" governance to make the central bank more accountable when it gains new regulatory powers next year.
In a report published today, the committee says the Bank's governance is out of date and too weak for its expanded task of combating financial crises.
The MPs call for the Bank's court to become a smaller, expert supervisory board with its own staff. The board should also decide where money is spent at the Bank, review the Bank's conduct and publish its minutes.
Andrew Tyrie, the committee's chairman, said: "The Bank of England will play an even more vital role in preventing future crises, yet aspects of its governance appear antiquated. The radical shake-up of financial regulation proposed by the Government provides the opportunity to do something about it."
The committee has been at odds with the court's chairman, Sir David Lees, over his refusal to hand over minutes of meetings that discussed the financial crisis. The MP's report calls for the revamped board to respond to reasonable information requests from Parliament. The Government is transferring powers for monitoring financial risks to the Bank by the end of next year in an attempt to ensure coordinated action.
The Bank's Governor, Sir Mervyn King, right, said: "The Bank has always made clear that with the expansion of its responsibilities envisaged in the draft Bill, new arrangements for the governance and accountability of the Bank would be necessary. The Bank will study the report carefully before responding to the Committee."
Last week, HSBC's chief executive, Stuart Gulliver, called for a Plc-style overhaul of the court to check the Governor's powers. Bob Diamond, the Barclays chief executive, said the Bank should be accountable to the Treasury and to Parliament.
In its report, the committee says the Chancellor of the Exchequer should have temporary powers to direct the Bank during a crisis, making the Treasury responsible when public money is at risk without compromising the Bank's independence.