These changes are a ratification of existing policy i.e. the bailing out of the banks at the expense of the general population. It also looks like a further concentration of financier power, something already observed by some authors in the USA.

Just as we, in our dotage relive childhood experiences, the British financier power is reliving its early days, going back through the various bubbles of the early 18th century, to its birth with the establishment of the Bank of England as a consortium of private financiers effectively controlling a weakened executive. The role of doge, allegedly shunned by William of Orange, now falls to the hapless Gordon Brown.

Bank of England changes leave Mervyn King in pole position

Jonathan Loynes 

19th June, 2008

Bank of England Governor Mervyn King has won new authority to manage financial crises and promotions for two of his proteges in the biggest shakeup of Britain’s economic policy making in a decade. Jonathan Loynes of Capital Economics explains that the changes will strengthen Mr King’s hand.

The changes at the Bank of England announced today would appear to strengthen the position both of the Bank itself and, in particular, the Governor Mervyn King.

	Mervyn King (left) and Charlie Bean are close allies

Not only has the Bank taken on more responsibility for banking supervision, albeit with accountability to a new “financial stability committee”, but confirmation of Charlie Bean’s appointment as Rachel Lomax’s replacement as Deputy Governor with responsibility for monetary policy will also be seen as a victory for King.

And if, as rumoured, Paul Tucker takes over from the “retiring” Sir John Gieve in the other Deputy Governor position, the Governor will have two bank insiders and close supporters at his side.

Bean’s replacement as the Bank of England’s chief economist, Spencer Dale, is also a Bank insider and a King ally.

It is always difficult to gauge how changes in the composition of the MPC will affect its voting behaviour but, at face value, the changes would seem to bolster King and his hawkish camp.