“Chancellor Alistair Darling has outlined plans to give the Bank of England new responsibilities in his Mansion House speech.

Speaking in his first keynote address to business leaders, the chancellor said the Bank would now be accountable for the UK’s financial stability.

This is in addition to its statutory objective of setting interest rates.

The radical new measures come in the wake of the collapse of Northern Rock amid global credit problems.

Part of the reforms will include setting up a new Financial Stability Committee, which will guide the Bank’s operations in this field.

“It will bring valuable, external expertise with City experience to bear on the Bank’s decision making,” he said.

“The challenge for us is to ensure that the authorities can act quickly and decisively where necessary to support financial institutions,” Mr Darling added.
He intimated that the proposals would clarify and enhance the powers of the Bank of England and the UK financial watchdog, the Financial Services Authority, and improve co-ordination between the regulators.
More details will come in a letter to the Treasury Select Committee chairman John McFall on Thursday.”

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