Downing Street Says » Governor of the Bank of England and Treasury

» Friday, June 26, 2009

Governor of the Bank of England and Treasury

Asked if the Prime Minister shared suspicions that Mervyn King was in an unholy alliance with the Conservatives, the PMS said no.

Asked if the Prime Minister was totally in agreement with Mervyn King regarding public finances and reducing debt, the PMS said that we were reducing debt; we had set out very clear plans to halve the deficit over four years.

Asked if the Treasury was planning a White Paper on the tri-partite structure giving more power to the Financial Services Authority (FSA), the PMS said that the Treasury would be publishing its proposals shortly and the White Paper would be published next month. We had been saying for some time that we needed to change and strengthen our systems for financial regulation. Lord Turner was asked to report on this, which he did in March, and this would form the basis of the Treasury s proposals in the White Paper. Due to the much more global integrated and complex financial markets that we faced now compared to 1997, we needed to look at how we could strengthen and reinforce the tri-partite system including through strengthened cooperation and coordination between the main institutions. In overall terms we needed tougher systems for financial regulations as the Chancellor had been making clear, and this was a time for taking action that strengthened our financial systems and did not weaken or undermine them.

Asked if the Prime Minister was concerned about the perception of the relationship between the Governor of the Bank of England and the Government, the PMS said that the Prime Minister felt it was important that the FSA, the Bank of England and the Treasury continued to work in very close cooperation; that s what we were doing and that s what we would continue to do.

Asked if relations with the Governor remained good, the PMS said yes.

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