Bank urged to improve crisis response

LONDON (Reuters) - The Bank of England needs to improve its handling of financial stability and communications, MPs said on Wednesday, as pressure grows on financial authorities to bolster how they deal with crises.

The Bank, the government and Financial Services Authority have faced criticism for their handling of the credit crunch which has resulted in the nationalisation of mortgage lender Northern Rock and could yet precipitate a housing market crash.

Parliament's influential Treasury Committee said it unanimously endorsed the re-appointment of Governor Mervyn King but argued there was room for improvement at the central bank.

"The skills, qualities and experience which Mervyn King brings to his role as Governor of the Bank of England will be greatly needed and tested in facing the challenges of his second term, not least the challenges arising from the current market turmoil and from anxieties over inflation," the Committee said in its report on King's re-appointment.

"We expect that the Governor will wish to strengthen the support and advice available to him to meet those challenges, particularly in the field of financial stability and in improving communications strategy and delivery."

The central bank has announced BBC journalist Jennifer Scott will head up its communications department in the coming months.