Brown didn't give bank enough power, says minister

Gordon Brown failed to give the Bank of England sufficient powers to ensure financial stability in Britain, the City minister admitted today.

Lord Myners praised the Bank, which was given independence after Labour swept to power in 1997, for keeping a lid on inflation with the monetary policy committee's role in setting interest rates. But he believes its hands have been partly tied in maintaining financial stability.

Lord Myners said: "The Bank of England has two core responsibilities: monetary policy and financial stability. With monetary policy, it has clearly performed its role to extraordinarily high standards.

"On financial stability, it has been hampered by the limited instruments available to it, which is one of the reasons we're proposing new legislation to give the bank more power to perform its statutory obligations."

The peer spoke out as former Federal Reserve chairman Alan Greenspan admitted he had made a mistake and had been "partially wrong" over the regulation of the banking industry.