Darling answers to the Treasury Select Committee
November 11, 2007
Following the recent run on stricken UK bank Northern Rock, the Chancellor of the Exchequer, Alistair Darling, has responded to questions from MPS on the committee, and has stated that more regulations for the banking industry are required.
Mr Darling is part of the tripartite authorities, along with the Bank of England and the Financial Services Authority, that were dealing with the Northern Rock crisis.
Mr Darling denied the fact that authorities had been dithering after discovering that Northern Rock had hit problems, and also denied that there had been a lack of communication between the tripartite authorities. Agreeing with the management of Northern Rock he stated that the cause of the problems seen at the bank had been unprecedented, and that there were important lessons to be learned from the whole incident.
Speaking to the Treasury Select Committee Darling said that he had been made aware of the potential problems at Northern Rock in mid-August. Referring to the Financial Services Authority he stated: “They said, ‘We think Northern Rock might have a problem.’” Some officials stated that the FSA and Bank of England should be merged, claiming that their separate responsibilities meant that the two authorities had kept one another out of the picture, but Darling disagreed.
According to Darling the Financial Services Authority had spent weeks trying to help Northern Rock to raise extra funds. He stated: “It was by no means certain that all was up with the bank. Extensive efforts were made to resolve the problems at the Northern Rock. It was not for want of trying.” When asked whether he thought that the tripartite system had failed Darling did not give a direct answer, but did state: “I accept responsibility for the tripartite system.”
Alan Wright
11th November 2007
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