The Bank of England (BoE) is planning to install an IT system to assess the risk of firms operating in the financial sector.

The effectiveness of BoE's risk assessment systems have been called into question by the LIBOR-fixing scandal by banks such as Barclays that is currently rocking the financial services sector.

The system will cost up to £2.5 million and allow the BoE to record companies’ risk scores, provide analysis and report on risk assessments. The bank will choose a supplier for the system by the end of the year.

The BoE also wants the capability to analyse firms by time series, peer group or sector, and be able to drill-down and aggregate within firm structures and generate advanced visualisations and management reports.

The supplier must also be able to integrate the system with the BoE’s document management system, FileSite, in order to refer back to stored documents.

Development and implementation is planned to be split over two phases, with the first to commence by the end of 2012.

The project will move on to the second phase after the BoE is confident the system is delivering the required analysis. It will focus on developing the interfaces to the analytical, contact and case management tools.

The contract will initially run for a three-year period, with the option to extend for two further years.

The Financial Services Authority (FSA) will also have a hand in selecting the supplier for the system.

It was revealed last year that the BoE had signed a contract with EMC to expand data storage with new SAN devices.