PART 1

The Bank of England

Financial arrangements

Examinations and reviews
11
In the Bank of England Act 1998, after section 7C (inserted by section 10) insert—

Examination by Comptroller and Auditor General
7D
1
The Comptroller and Auditor General (“the Comptroller”) may carry out examinations into—
a
the economy, efficiency and effectiveness with which the Bank has used its resources in discharging its functions;
b
the economy, efficiency and effectiveness with which a Bank company has used its resources in discharging its functions.
2
An examination under this section may be limited to such functions (however described) of the Bank or the Bank company as the Comptroller considers appropriate.
3
An examination under this section is not to be concerned with the merits of the Bank's policy objectives.
4
An examination under this section is not to be concerned with the merits of—
a
policy decisions taken by the Financial Policy Committee, the Monetary Policy Committee or the Prudential Regulation Committee;
b
policy decisions taken by a committee or other body within the Bank for the time being having responsibilities for the supervision of payment systems, settlement systems or clearing houses, so far as the decisions relate to that supervision.
5
Subject to subsection (6), an examination under this section is not to be concerned with the merits of policy decisions taken by a committee or other body within the Bank for the time being having responsibilities for the exercise of any of the Bank's resolution functions, so far as the decisions relate to those functions.
6
Where the Bank has exercised relevant resolution functions in relation to a financial institution, subsection (5) does not prevent an examination under this section being concerned with the merits of policy decisions within that subsection which are relevant to the Bank's exercise of its resolution functions in relation to that institution (whether or not those policy decisions are also relevant to other financial institutions).
7
“Relevant resolution functions” are—
a
any of the stabilisation powers;
b
any of the Bank's functions (other than its functions as the Prudential Regulation Authority) under or by virtue of—
i
Part 2 or 3, or section 233, of the Banking Act 2009,
ii
Part 6 of the Financial Services (Banking Reform) Act 2013.
8
Before carrying out an examination under this section, the Comptroller must consult the court of directors of the Bank.
9
The Comptroller may report to the House of Commons the results of any examination carried out by the Comptroller under this section.
10
For the purposes of this section—
- “Bank company” means—
  1. a company which is a subsidiary undertaking of the Bank, within the meaning of section 1162 of the Companies Act 2006;
  2. a company not within paragraph (a) in respect of which a direction under section 7C(2) has effect;
- “resolution functions” means the Bank's functions (other than its functions as the Prudential Regulation Authority) under or by virtue of—
  1. Parts 1 to 3, and section 233, of the Banking Act 2009,
  2. Part 6 of the Financial Services (Banking Reform) Act 2013,
  3. the Bank Recovery and Resolution (No. 2) Order 2014 (S.I. 2014/3348);
- “stabilisation powers” has the same meaning as in the Banking Act 2009 (see section 1(4) of that Act).
11
Section 6 of the National Audit Act 1983 (Comptroller may carry out economy, efficiency and effectiveness examinations) does not apply to the Bank or a Bank company.

Memorandum of understanding
7E
1
The Bank and the Comptroller must prepare and maintain a memorandum of understanding about examinations under section 7D.
2
The memorandum must in particular include provision—
a
as to functions of the Bank in respect of which the Comptroller will not usually consider it appropriate to carry out an examination;
b
identifying the committees or other bodies referred to in section 7D(4)(b) and (5);
c
establishing a procedure for resolving in a timely fashion any dispute between the Bank and the Comptroller as to whether a matter is (under section 7D(3) to (6)) a matter with which an examination under section 7D is not to be concerned;
d
for the publication of the views of the Bank and the Comptroller as to whether a matter is such a matter, in cases where a dispute between them cannot be resolved.

Review by the Treasury
7F
1
The Treasury may appoint an independent person to conduct a review of the economy, efficiency and effectiveness with which the Bank has used its resources in discharging its functions as the Prudential Regulation Authority.
2
“Independent” means appearing to the Treasury to be independent of the Bank.
3
A review under this section may be limited to such of the Bank's functions as the Prudential Regulation Authority (however described) as the Treasury may specify in appointing the person to conduct it.
4
A review under this section is not to be concerned with the merits of the Bank's general policy or principles in pursuing the Bank's objectives (including its objectives as the Prudential Regulation Authority).
5
On completion of the review, the person conducting it must make a written report to the Treasury—
a
setting out the result of the review, and
b
making such recommendations (if any) as the person considers appropriate.
6
A copy of the report must be—
a
laid before Parliament, and
b
published in such manner as the Treasury think fit.
7
Any expenses reasonably incurred in the conduct of the review are to be met by the Treasury out of money provided by Parliament.

Right to obtain documents and information
7G
1
A person conducting an examination under section 7D or a review under section 7F—
a
has a right of access at any reasonable time to any document the person may reasonably require for the purposes of the examination or review, and
b
may require any person holding or accountable for any such document to provide such information and explanation as are reasonably necessary for that purpose.
2
Subsection (1) applies to documents in the custody or under the control of—
a
the Bank;
b
the auditor or auditors appointed by the Bank under section 7(5).
3
In the case of an examination under section 7D(1)(b), subsection (1) also applies to documents in the custody or under the control of—
a
the company to which the examination relates;
b
the auditor or auditors of that company.
4
An obligation imposed on a person as a result of the exercise of the powers conferred by subsection (1) is enforceable by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

Restriction on disclosing information
7H
Section 353A of the Financial Services and Markets Act 2000 (FCA not to disclose certain information received from the Bank) applies in relation to the Comptroller and Auditor General and the National Audit Office as it applies in relation to the Financial Conduct Authority.
S. 11 in force at 6.7.2016 for specified purposes by S.I. 2016/627, reg. 2(1)(l)
S. 11 in force at 1.3.2017 in so far as not already in force by S.I. 2017/43, reg. 2(b)