David Cameron yesterday backed plans to restore the 'eyebrow of the Bank of England governor' to a central role in governing the City, in a move that would fundamentally shift the balance of power in the way banks are regulated.
Cameron gave a strong signal that a Tory government would restore the Bank’s former powers to intervene in an individual bank if it felt its business model or lending practices were running out of control.
The Conservative leader’s comments signal his commitment to make the Bank the ultimate enforcer of discipline in the City, shifting power away from the Financial Services Authority, which has been widely criticised for its role in the banking crisis.
Cameron, speaking at the Stock Exchange, spoke warmly of a former era when 'one twitch of the governor’s eyebrow would be enough to get our banks to behave responsibly'.
He said: 'We are considering the suggestion we should give the Bank of England the power to go into individual banks.'