Bundesbank blasts plan to hand Bank of England regulatory powers I refused it flat... I thought this was too high a price to pay. Even if I had to do it again, I would not risk the independence of the institution," said Mr Weber, who now chairs Swiss bank UBS. The warning was echoed by Olivier Blanchard, a senior official at the International Monetary Fund, who said that giving central banks more control over the financial system risked creating a "democratic deficit." The comments came at a debate chaired by Sir Mervyn King, the outgoing Governor of the Bank of England, at the London School of Economics. Sir Mervyn has come under pressure in recent months to reform the governance of the Bank in light of its new powers that will see it from next month taking on the supervisory responsibility for the banking system. Ahead of next month's handover of powers, the Bank's Financial Policy Committee will tomorrow give an update on the capital shortfalls of UK banks. The FPC said in November that it thought Britain's banks were undercapitalised by as much as £60bn and directed the Financial Services Authority to examine the lenders" balance sheets closely. Canadian Mark Carney, who will take over from Sir Mervyn in June, was among those in the audience at the LSE. He is understood to favour a series of changes to the governance of the Bank in light of its new powers. The Treasury Select Committee has led the political calls for the Bank of England to overhaul its Court, the central bank's governing body. The Bank of England was originally granted its independence in 1997, but since the financial crisis of 2008 it has been handed increased powers to ensure the stability of the UK's financial system.