The late ticker: Bank counters Labour

The Bank of England has stepped up its campaign to head off the Labour Party's threat to strip it of its banking supervisory role.

Howard Davies, the Bank's deputy governor, said in a speech in the US yesterday that it made sense for supervision to be carried out by the same body that had responsibility for maintaining the stability of the financial system.

Mr Davies called for a Holy Trinity approach to regulation which would see three separate bodies with responsibility for banks, insurance and financial services.

Labour has promised a sweeping review of financial regulation if it wins the election. It has considered a separate banking commission but is now understood to be leaning more towards leaving the Bank's current role broadly intact.

Mr Davies also argued for the consolidated regulation of international financial institutions and said he was optimistic that legislation would soon be enacted to codify their regulation.