Watching the defectives (with apologies to Elvis Costello)

Governance of the Bank of England is "defective", according to the chairman of the Treasury Committee following the publication of three independent reviews into the Bank's performance.

The three separate reviews, commissioned in May this year, looked at the Bank's emergency assistance to HBOS and RBS banks in October 2008 at the height of the financial crisis; the Bank's ability to provide funding to the banking system as a whole; and its forecasting abilities.

The first, by Ian Plenderleith, a former member of the Bank's Monetary Policy Committee, suggested in the run-up to the financial crisis there was greater focus on systemic risks rather than on the potential failure of an individual financial institution.

The report also said the Bank was dependent on the City watchdog, the Financial Services Authority, for information on individual banks' cash flow, but that this data was not detailed enough. It added that Bank was only insured against the loss of 12% of the total amount of money lent to HBOS and RBS - £51.1bn was not covered.

The loans "constituted amongst the biggest risks to the Bank's balance sheet in its history", the report said.

The second review, by Bill Winters, a former JP Morgan banker and member of the Independent Commission on Banking, questioned the "robustness" of internal governance at the Bank.

While the report acknowledged that "less senior staff are often willing to challenge their superiors... there appears to be some tendency for them to filter recommendations in such a way as to maximise the likelihood that senior staff will find the recommendation palatable.

"While this makes it easier for the governor, as ultimate decision-maker, to reach conclusions, it risks reducing the range of views he sees and, as such, might lead to a less effective overall outcome."

The final report by at the Federal Reserve, questioned the forecasting abilities of the Bank, saying they have deteriorated since the onset of the financial crisis, and are not as accurate as those made by external forecasters.

On balance quite an indictment of the people who had their hands on the tiller as we approached the perfect storm.