Bank facing Treasury grilling over Northern Rock

A supposed rift between the FSA and the
Bank of England over the bail-out
of Northern Rock will be the basis of a grilling Mervyn King is likely to be
subjected to by Treasury committee MPs today.

According to
MPs will demand that King and other members of the BoE’s monetary
policy committee (MPC) throw light on suggestions that the regulator repeatedly
urged the Bank to intervene earlier in the crisis at the mortgage lender.

The grilling is expected as MPC members come before the Treasury committee to
discuss this week’s inflation report and follows reports that the FSA pressed
King to widen the types of collateral the BoE would accept when lending to
financial institutions.

Further reading:

Northern Rock under fire over exec pay rises

FSA: Northern Rock ‘solvent’

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