New deputy governor at Bank of England

The Bank of England has appointed Charles Bean as the deputy governor for monetary stability, with effect from July 1st.

Mr Bean – the current chief economist - will replace Rachel Lomax, who is due to step down from the monetary policy committee (MPC) at the end of the month.

In turn Mr Bean will be replaced in his role as chief economist by Spencer Dale, currently a senior economist at the Bank - presently on secondment to the US Federal Reserve.

The news follows the resignation of Sir John Gieve, following questions over his role in the present turbulence and reaction to the Northern Rock crisis.

It is reported Mr Gieve opposed the appointment of My Bean, but this stumbling block to the appointment has now been removed.

In addition to this the chancellor announced, in future, the government will advertise vacancies for the governor and deputy governors of the Bank of England, consistent with the principles of open competition.

"I am delighted to announce the appointment of Charlie Bean as deputy governor for monetary stability at the Bank of England," said chancellor Alistair Darling.

"He is a world-class economist with a great depth of experience in both academia and policy making environments. Appointing an economist of Charlie's calibre is particularly important amidst the significant global economic challenges the UK economy is presently facing."

The chancellor also outlined proposals to enhance the role of the Bank of England in preserving financial stability – measures which are expected to be included in the banking bill later this year.

The chancellor's proposals focus on:

- Provision of a statutory responsibility for financial stability for the Bank of England.

- Changes to the governance structures of the Bank of England, to support the Bank and the governor in the exercise of these new responsibilities, including the establishment of a new Financial Stability Committee (FSC) of the Court.

- Provision of a range of tools for the Bank to enable it to carry out its responsibility in this area. This will include a leading role in the implementation of the new special resolution regime (SRR), should it be triggered by the FSA, including powers related to deploying and implementing the SRR tools.

"I am delighted that the Treasury has asked Charlie Bean to take on this vital role overseeing our monetary policy work," added Mervyn King, government of the Bank of England.

"I am extremely grateful to Rachel Lomax for her contribution to the MPC, her tireless devotion to the work of the Bank and her personal support and wise counsel over the past five years."