New City watchdog cost almost £50m to establish

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THE Bank of England spent almost £50 million creating the new City watchdog the Prudential Regulation Authority (PRA), it has been revealed.

The PRA, which came into existence on 1 April, cost the bank £48.5 million in the year to the end of February, bringing the total cost of replacing the scrapped Financial Services Authority (FSA) to £64.7m.

Relocating FSA staff to the PRA’s new offices at 20 Moorgate – near to the Bank’s own headquarters at Threadneedle Street – cost £22.8m, with the axed regulator’s former premises at Canary Wharf – 20 North Colonnade – costing the bank £19m in an “onerous” lease.

Staff numbers at the bank rose to 2,307 as of the end of February, up from 2,045 on the prior year. Wages were down slightly to £132m from £137m in 2012.

The accounts confirmed that HM Treasury made gross proceeds of £2.3bn on the Special Liquidity Scheme, designed to support UK banking during the crisis, in January last year.

It also noted that the value of sterling notes in circulation was £58bn as of end of February – up from £54.9bn same time last year.

The accounts showed remuneration for outgoing governor Sir Mervyn King and his two deputy governors, trod water in 2012-13. The governor’s total remuneration of £307,750 compared with £307,792 in the previous year. He retires with a £5m pension pot paying him around £200,000 a year.

Mark Carney, who takes over on 1 July, will receive £480,000 a year, plus a cash allowance of £144,000 in lieu of pension and a £250,000 accommodation 
allowance.

King said he was leaving the institution “in safe hands” as he signed off his final annual 
report.