Bank of England failed to spot financial crisis a month before it broke

The head of the Treasury Select Committee has slammed the Bank of England for failing to spot the onset of the credit crisis a month before it happened.

Andrew Tyrie, chair of the parliamentary commission on banking standards and the Treasury select committee, also said officials had exacerbated the crisis by not holding BoE executive and non-executive members responsible.

"The minutes show that during the crisis the Bank of England did not have a board worthy of the name. This mattered. And it still matters," said Tyrie.

"Even when questions were asked by individual non-executive directors, the executive usually presented a unified front to the Court, apparently rendering it of little or no use as a forum for creative discussion and constructive challenge.

"Non-executive directors appear to have done little thinking of their own about financial stability and to have added little or no substantive value to the Bank's work on it. They may have achieved the opposite."

The Court is the Bank of England's board of directors. Much like the board of a regular company, it meets to help set strategic direction and act as a check on its governor. It includes BoE officials as well as non-executive directors.

In a bid to boost transparency, the BoE unveiled nearly 500 pages of minutes of meetings of its Court but it did not identify directors' individual comments.

One of the non-executive directors at the time included Labour peer Paul Myners, who later went on to lead the independent review into the Co-operative Group, in which he criticised the ethical company's board as "manifestly dysfunctional".

Mervyn King was the BoE governor at the time of the published minutes. In 2012 he admitted that the BoE had failed to properly identify the risks facing the financial sector pre-credit crisis.

However, he blamed some of the financial sector's failings on the de-regulation of banks in 1997.