Cat bites Kit
THE Bank of England prowls around the City like a cat which cannot think where the canary has gone but keeps licking its whiskers. Asked about the changes at the Midland, the Bank says demurely that it lent its good offices. Jolly good they are too, with some fine period furniture. There is, though, more to this story than the Bank as honest broker, as purveyor of nods and winks to the City, or even as headhunter. The Bank took the initiative and cleared its lines with the Treasury. It must be remembered that, once it can invoke the interests of depositors, the health of the banking system and — by implication — the need for a riposte to rumours, the Bank does not only have influence; it has powers. The Banking Act requires and empowers it to satisfy itself about a bank's management. Behind that is a nuclear threat, never yet used — the power, under the Bank of England Act, to give directions to banks. Sir Kit, of course, knows all this better than anyone. What a wretched turn of events! For a while, he halted the Midland's decline. In the end, he could not reverse it. If the two new plain cooks cannot do it, then, I dare say, it cannot and could not be done.