Chancellor responds to questions from the Treasury
June 22, 2008
The Chancellor of the Exchequer, Alistair Darling, has been responding to questions from the Treasury Select Committee recently following the chaos that occurred at Northern Rock in September. Along with the Bank of England and the Financial Services Authority, Darling is part of the tripartite authorities that were handling the Northern Rock situation. Darling answered questions from the committee and also stated that increased regulations in the banking sector were needed.
Mr Darling stated that after finding out about the problems at Northern Rock in August action was taken to try and help the ailing bank. He said that the Financial Services Authority had tried to help the bank with funding issues for some weeks, adding: “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.”
The chancellor was asked whether the tripartite system had failed, and although he did not respond directly to that question he did state that he took full responsibility for the tripartite system. He added that he had found out about the problems being experienced with Northern Rock from the FSA in August. Apparently the FSA contacted the chancellor and told him that they thought that the bank was experiencing problems.
Darling also denied accusations that the various authorities involved had dithered and failed to keep one another in the picture. He disagreed with suggestions that the FSA and the Bank of England should be merged to combine their responsibilities in order to avoid problems in the future. Darling also added that there were many important lessons to be learned from the whole situation with Northern Rock.
Recente additions:
- Faster bank transfers could mean increase risk of fraud
- Switching banks was rife this year
- Continued problems for Northern Rock
- Treasury clarified guarantee over savings
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