Sir Mervyn King’s ‘revisionist’ view of BoE role in financial crisis creates pressure for offical review

Andew Tyrie, chairman of the Treasury Select Committee, said the Bank “should get on with it at the first available opportunity” after the Governor conceded that “if it were felt there should be another inquiry into the events after [Northern Rock] we would be very happy with that and we would co-operate”.

The Telegraph reports that sources at the Select Committee expressed astonishment at the Governor’s comments, with one saying: “How many times has the committee asked them to do this, and how many times have they refused to do so?” The Bank remains the only member of the tri-partite system of regulation not to have exposed itself to public scrutiny. The Financial Services Authority (FSA) and the Treasury have both published reviews into their roles in the crisis.

The pressure followed accusations from economists that the Governor had recast the past with a BBC radio lecture by claiming the Bank “did preach about the risks” of a financial crisis and that there had been “no boom before the bust”.

“There are no busts without booms,” Andrew Sentance, a former member of the Bank’s rate-setting Monetary Policy Committee, said. “[You] need to look harder to find the boom – in this case [it was] global and financial, not domestic UK inflation.”

Danny Gabay, a director of Fathom Financial Consulting and a former Bank official, said the trebling in house prices and surge in household debt from 90pc to 162pc of household income between 1997 and 2007 provided clear evidence of a bubble.