MPs deliver damning credit crunch report card

Following the loss of billions of pounds in the global credit crisis, a
damning report by Britain’s MPs urges the country’s financial regulator and its
central bank to develop a better way of warning banks and investors of high

In the report, the
Treasury Select Committee
criticises the
Financial Services
(FSA) and the
Bank of England
(BoE) for failing to ensure financial companies were prepared for the worldwide
closure of credit markets, The Times reports. The government must
respond to the charges within two months.

‘It is clear that many market participants failed to heed warnings about a
serious underpricing of risk and the potential for impaired liquidity in
financial markets in the mistaken belief that the good times would go on and
on,’ John McFall, committe chairman, said:

The committee will recommend that, in future, the regulator and the bank
should write a letter to financial companies, highlighting two or three key
risks. The MPs believe the two institutions should then seek confirmation the
companies have considered the risks and publish a commentary on the responses.

Further reading:

FSA to consider Rock lessons

Ex-FSA chief set to face crunch questions

story in the The Times

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