Osborne calls for BoE changes

The Conservative shadow chancellor has said that changes must be made to the way in which the Bank of England operates in order to safeguard against any further financial crises.

Speaking on Channel 4 News, George Osborne suggested that the Northern Rock debacle could have been avoided had the Bank of England had more independence.

Prime minister Gordon Brown made the Bank independent in 1997 as Labour came to power, but the institution has been criticised of late for failing to act quickly enough to stem problems with Northern Rock.

"Going forward I think the Bank of England needs to have a greater power to basically seize a bank before it becomes insolvent, or before it runs out of money, and then dispose of the bank, by way of a private sale for example, without all the regulatory problems that the Bank of England and the Treasury ran into in September," Mr Osborne told the programme.

"So a pre-emptive power for the Bank of England that would also secure the bank's reputation for independence and give it that power to deal with a financial crisis," the MP added.

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