Darling Calls For More Bank Rules

by Robert Lee, Tax-News.com, London

26 October 2007

In the wake of Northern Rock's recent problems, UK Chancellor Alistair Darling has announced that changes must be put in place within the UK's banking regulation system in order to prevent similar events from occurring in the future.

Mr. Darling voiced this opinion at a recent Treasury Select Committee meeting. The Chancellor claimed that blame for the situation lay not only in the hands of the Treasury, but also jointly with the Bank of England and the Financial Services Authority (FSA).

Speaking about the government's plans for the future of the banking system, Mr. Darling announced, according to the BBC, that: "There needs to be better regulation to stop banks hiding things off-balance sheet."

On the subject of Northern Rock, despite urging the bank to get its financial affairs in order as soon as possible, the Chancellor was quoted by the Press Association as announcing that: "I really want to get to get across to the bank that they have got a breathing space. They have got to consider their options."

"I very much hope that the directors will use this opportunity to try and find a way to enable the bank to carry on in one shape or form. That has to be a matter for them at the end of the day."

Mr. Darling reportedly acknowledged that the ideal solution would have been to merge Northern Rock with another institution, as "no-one anticipated a complete freezing of liquidity, which was unprecedented in modern times".

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