LONDON (Reuters) - Calls for the Bank of England to create a new super-committee to oversee both the economy and the financial system would overload policymakers and raise the risk of the kind of mistakes seen before the financial crisis, a top official at the BoE said.
Deputy Governor Ben Broadbent said merging the separate monetary and financial policy committees - as sometimes proposed by politicians - would make decision-making too complicated, possibly leading to complex issues going unchecked.
“Perhaps we collectively fell foul of this trap, in some ways, ahead of the crisis,” Broadbent said in a speech he was due to give via video-link to a conference at Australia’s central bank on Thursday.
“The risk of a rare event is not an easy thing to judge and, having gone so long without a serious problem in the financial system, our attention was distracted by the more easily monitored task of stabilizing the economic cycle.”
Britain’s government gave the BoE greater powers over the country’s huge financial services industry after the banking sector was hammered by the 2007-08 global financial crisis, pushing the economy into a deep recession.
Some lawmakers in Britain’s parliament, who monitor the BoE’s work, have suggested merging the monetary and financial policy committees because of the way their roles can overlap.
Writing by William Schomberg; Editing by Hugh Lawson