A fantastic piece from Dan Conaghan, author of The Bank: Inside the Bank of England, over at IFAonline on how the Bank has fared, 15 years after New Labour came to power and reformed the institution in 1997.
‘Fifteen years ago to the week, in May 1997, the thumping strains of D:Ream’s Things Can Only Get Better heralded the arrival of Tony Blair, Gordon Brown and New Labour. The music was still ringing in the new chancellor’s ears as he gave the Bank of England its independence.
History does not relate whether there was any “old-fashioned disco dancing”, in Sir Mervyn King’s inimitable phrase, in Threadneedle Street that week. But the Bank seized its opportunity – to direct monetary policy without fear or favour – with both hands.
Fifteen years on, in May 2012, you might say, there is no need to change the record. But how has the Bank of England fared?
The briefest potted history since 1997 shows five years of blameless, benevolent rule under Eddie George until Mervyn King’s accession in 2003. Against a picture of economic prosperity, King modernised the Bank, but in pursuit of a purist, economics-led vision and at the expense of the Bank’s financial stability mandate.
And since mid-2007, the avoidable tragedy of Northern Rock and the ensuing credit crisis, the Bank has struggled to maintain its dignity, let alone its reputation for economic probity.’
You can read on to find out the effect of quantitative easing, and who Dan thinks will be the next Governor of the Bank of England. Of course, to read the full inside story of the Bank of England, you can read the book!