The Bank of England was nationalised in 1946. Over the 50 years that followed it became the Department of Monetary Affairs. Like other government departments it looked backward to please its political masters and forward to please its clients. Like a department, the Bank was responsible for the implementation of government policy towards its sector and for the representation of the interests of the sector within government. As with other government departments, the danger was to emphasise one function at the expense of the other: for the tax collector to be seen as a hostile force, for the Foreign Office or agriculture departments to be seen as lobbyists for foreigners or farmers.

An independent agency with a public role, as the Bank of England became in 1997, also has responsibilities both to government and to its client sector. But both aspects of the role change. A regulatory agency faces the danger of undue receptiveness to political pressure in looking backward. There is the danger of regulatory capture – in looking forward, the agency becomes the creature of those it regulates.