Downing Street Says » Northern Rock

Asked whether the Government would consider changing the four laws that the Governor of the Bank of England had said had prevented him from doing his job, the Prime Minister’s Spokesman told the assembled press that the Chancellor would be making a statement on the matter to the Houses of Parliament when they reconvened. Asked if the Government was sympathetic to the idea put forward by the Governor, that if he could have arranged a takeover of Northern Rock, or been able to carry out the actions of last resort covertly, a run on the bank could have been prevented, the PMS said that financial markets had become increasingly complex and fast moving and there was constant innovation. The PMS added that all of the Government’s legislation was kept under constant review. The Governor had put forward a number of proposals, which were being looked at by the Treasury.

Put that it sounded like there would be new rules at some point, the PMS urged people to wait and see how the Treasury process progressed, and that this was an issue where, if there were changes made, they would have to be carried out correctly.

Asked whether comments made in the press by the European Commissioner, stating that it was untrue that EU directives banned covert action, were true or not, the PMS said the Governor of the Bank of England was pressed on the issue yesterday and had dealt with it, so he would not be adding anything to that.

Asked whether the phrase "everything was kept under review," included the tripartite system, the PMS said that the Governor was referring to the four specific issues raised yesterday. Asked outright if the tripartite system was under review, the PMS said that the issue for now was to focus on restoring stability in the financial system. When asked who held the responsibility of maintaining stability in the tripartite system, the PMS replied that the Governor of the Bank of England was asked the question yesterday and could give a more in-depth answer.

Asked whether Treasury staff had been fully focussed on the issue of financial stability over the past year, the PMS said that everyone at the Treasury had been fully focussed on their responsibilities.

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» Friday, September 21, 2007

Northern Rock

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