Financial Reform Bill - what goes around, comes around

A look at the bills set out in the Queen’s Speech yesterday shows a handful which will be of interest to students of economics, including the Office of Budget Responsibility bill, the Postal Services bill, the Welfare Reform Bill, the Energy and Green Economy bill and the Pensions and Savings Bill - a look through the list gives an opportunity to analyse the micro and macroeconomic impact that each might have.

The Financial Reform Bill will shift responsibility for macro-regulation of the banking system from the Financial Services Authority to the Bank of England. Not for the first time, though - my first job was at the Bank of England, and one of the offices of the Chief Cashiers Department at the time was the Banking and Money Markets Supervision section - whose responsibilities were defined by their title. To quote from the Bank’s Archive Guide:

“In 1980 a new area named Financial Structure and Supervision was made responsible for both the supervision of individual institutions and for the structures of the markets and their methods and techniques of operation. The grouping of divisions concerned with monetary policy, market operations and research was named the Policy and Markets area.

In 1994, following the reorganisation of the Bank, Banking Department became Banking & Market Services (BMS), part of the newly-created Monetary Stability Wing, and Banking Supervision Division became Supervision & Surveillance (S&S). Following changes to the Bank introduced by the new Labour government in 1997, S&S left the Bank entirely in 1998 and went to a new external body, the Financial Services Agency.”

What has been will be again, what has been done will be done again; there is nothing new under the sun. (That quote comes from the Bible, not the Bank of England!) Will they bring back the old Exchange Control department as well?