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Ben Broadbent, the deputy governor who oversees monetary policy at the Bank of England, has been named to the central bank’s new Prudential Regulation Committee in an overhaul of its architecture.
The move is part of a shake-up of the BoE that brings in the Prudential Regulation Authority so it is no longer a separate entity. Up until now, the PRA has been a legal subsidiary of the BoE. The revamp completes the work of breaking up the old Financial Services Authority, — the defunct City watchdog that was split up in 2013 — and giving part of its remit overseeing the biggest lenders and insurers back to the central bank.
The PRA’s board will be replaced by the Prudential Regulation Committee, which will have equal standing with the BoE’s other committees — the Monetary Policy Committee and Financial Policy Committee.
The new PRC will have the same membership as the PRA board, with the addition of Mr Broadbent, 52, the BoE said on Tuesday.
Mr Broadbent has been deputy governor for monetary policy since 2014, and was formerly an economist at Goldman Sachs.
Mark Carney, governor of the BoE, said: “The creation of the Prudential Regulation Committee tomorrow will deliver a simpler and more coherent governance structure within the Bank, while ensuring that the Prudential Regulation Authority remains strongly focused on its statutory objectives. Ben’s appointment brings macroeconomic and microprudential perspectives even closer together within One Bank to promote the safety and soundness of PRA-supervised banks and insurers.”
The old FSA was blamed for its light-touch regulation in the run-up to the financial crisis and was split into the PRA and the Financial Conduct Authority. The FCA’s chief executive is Andrew Bailey, who was moved across from the PRA last year by the former chancellor, George Osborne.
The PRA specialises in so-called micro-prudential regulation — or the oversight of individual lenders and insurers — while the FPC is tasked with macro-prudential duties — or examining the safety and soundness of the UK’s financial system as a whole. The MPC, meanwhile, sets the official interest rate.
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