HM Treasury News Release
128/97                                       28 October 1997
______________________________________________________________

           BANK OF ENGLAND BILL PUBLISHED

The Bill, which establishes the Bank of England Monetary
Policy Committee and transfers banking supervision from the
Bank of England to the Financial Services Authority was
published today.

The Bank of England Bill, gives effect to the policy changes
announced by the Chancellor, Gordon Brown on 6 May when he
announced a new framework for monetary policy and 20 May when
the transfer of banking supervision was announced.

The main provisions are:

 -   setting out the monetary policy objectives of the Bank:
     to maintain price stability and, subject to that, to
     support the Government's economic policy, including its
     objectives for growth and employment;

 -   establishing the Monetary Policy Committee, which will
     have responsibility within the Bank for formulating   
     monetary policy. The Committee will comprise the  
     Governor, his two deputies and six other members. Two of
     those members will be the Bank officials responsible for
     monetary policy analysis and monetary policy operations
     respectively. The remaining four will be appointed by the
     Chancellor for their knowledge and experience;

 -   giving the Bank statutory operational responsibility for
     monetary policy. The Treasury will still have reserve
     powers, in extreme economic circumstances, to direct the
     Bank with respect to monetary policy, if they are satisfied
     that this is required in the public interest;

 -   transferring to the Financial Services Authority the 
     Bank's functions in relation to the supervision of banks;

 -   setting in place a new accountability framework for the 
     Bank, based on:

     -    statutory duties of the Bank's Court of Directors,
          and  specific responsibilities for the non-executive
          Directors;
     -    requirements for the Bank's accounts; and
     -    laying the Bank's annual report before Parliament.

 -   greater transparency in the Bank's operations:

     -    the Monetary Policy Committee will publish its
          actions, minutes of its meetings and a quarterly report;
          and
     -    the Court of Directors will review the Monetary
          Policy Committee's procedures and make an annual
          report.

 -   placing on a statutory basis arrangements for banks,
     building societies and overseas institutions to place
     deposits with the Bank in order to fund its operations.

The Government's intention is that the overall costs to
financial institutions in aggregate, under the new
arrangements, will be no greater than under the current
arrangements, and preferably lower. The Financial Services
Authority issued today a consultation document on its fee
structure for banking supervision. The Treasury will be
issuing soon a consultation document on the statutory cash
ratio deposit scheme.

The Bill was given its First Reading in the House of Commons
today.

NOTES TO EDITORS

1.   Further information on the Bank of England Bill is
available in Treasury News Release 129/97.

2.   A note on the main provisions of the Bill is available
from the Treasury on 0171 270 5185 (for media copies) and 0171
270 4860/4870 (non-media copies).


3.   If you have access to the Internet you can find this news
release at  http://www.hm-treasury.gov.uk.  Material on other 
Treasury issues can also be found at this site.