Growth demand splits Bank committee The Bank of England committee charged with ensuring the stability of Britain's banks is split over George Osborne's plan to oblige it to support the government's new growth agenda. In a little-noticed section of his Mansion House speech last Thursday, the chancellor said the BoE's Financial Policy Committee should no longer focus narrowly on safeguarding the banking sector. The FPC should not be creating "the stability of a graveyard," he said, and in future would have a "secondary objective to support the economic policy of the government." The change of tack has divided the committee, prompting criticism both within and outside the BoE that its independence and the FPC's financial stability mission could be undermined. "It is bizarre," said one critic. The committee is a regulator, not an instrument of the government's economic policies. At a sometimes rancorous FPC meeting on Friday, Sir Mervyn King, BoE governor and chairman of the committee, heard accusations from at least one member that the new objective fundamentally clashed with the FPC's stability brief, according to people familiar with the discussion. It is unclear to what extent other members of the 11-man committee agree with the criticism. But two prominent members - the BoE's director of financial stability Andy Haldane, and Lord Turner, chairman of the Financial Services Authority - have been vocal advocates of the view that regulators should help fuel growth. Sir Mervyn is also said to be "entirely comfortable" with Mr Osborne's new stance, although he has promised to reflect both sides of the argument in a letter to the Chancellor. Critics say the dual role that will be required of the FPC has echoes of conflicts at the FSA, the chief financial regulator that is being partially absorbed by the BoE. In the run-up to the financial crisis, the FSA combined its regulatory responsibilities with a drive to boost the City of London with "light-touch" supervision - often at the behest of the then Labour government and with ultimately fatal consequences for financial stability. Since the FPC was created last year as a sister organisation to the BoE's Monetary Policy Committee, it has gained a reputation for taking a hardline attitude on bank capital and liquidity requirements, much to the annoyance of the banking industry. "This is clearly George slapping down the committee," said one investment banker who has advised the government.