Bean: ‘Bank committee has weaknesses’

The Bank of England’s deputy governor has admitted that its new financial policy committee (FPC) “may sometimes prove relatively ineffective” in preventing another financial crisis.

Charlie Bean also cast doubt on the prospects of ever solving the problem of banks becoming too big to fail, but said new rules designed to force lenders to hold more capital will give them greater resilience against potential losses when they are phased in next year.

In a speech to the University of Hull, he said: “Recent and prospective regulatory reforms seek to reduce the too big/too complex to fail problem, but eliminating it entirely may be an aspiration too far.

“What will determine the worth of the FPC will be whether it is successful in heading off the really big risks.”