Applauding regulators, and especially the financial variety, is rare but maybe the tide is finally changing. It was a delight to see Ofgem attacked this month by its previous chiefs for reducing competition and thereby contributing to higher prices, i.e. the opposite of what utility regulators are supposed to do. Likewise it was a delight to read in The Times (“Regulators join bandwagon heading away from Bank”, 18th August) that the Prudential Regulation Authority (PRA) has lost 160 staff. That is only 10% of the total and the cynical may believe that they were always lost. Even so, it is a step in the right direction and the Governor’s “One Bank” plan deserves some of the credit.
The Bank’s present 3,600 staff compares with 2,900 in February 1997, i.e. before Gordon Brown removed banking regulatory and supervisory responsibility. This compares like with like. In 1974, Bank of England staff numbered 5,500 excluding print workers. The long term staffing levels are declining but, with the transfer of regulation to Brussels, Mark Carney should still be looking to halve the current number to about 1,800. For comparison, the Bank of Canada has, according to its latest (2012) Annual Report, 1,239 staff.
The odd thing about The Times report is its sepulchral gloom. We should be rejoicing that personnel are leaving the PRA and that they are joining trading banks to direct their compliance. Surely less interference from bureaucrats and more self discipline by banks is just what we want?
Why only two cheers for the Governor? Things seem to be going in the right direction at last but they have a long way to go.