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| Version 5 | Version 6 |
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| Governor seeks more bank powers | Governor seeks more bank powers |
| (10 minutes later) | |
| The Governor of the Bank of England has called for the Bank to gain more powers so it can carry out its new role of promoting financial stability. | The Governor of the Bank of England has called for the Bank to gain more powers so it can carry out its new role of promoting financial stability. |
| In a major speech in London, Mr King compared the bank to a church which sees its congregation at key events but is ignored in the interim. | In a major speech in London, Mr King compared the bank to a church which sees its congregation at key events but is ignored in the interim. |
| He said how the central bank would apply its new powers was "not clear". | He said how the central bank would apply its new powers was "not clear". |
| The major lesson of the finance crisis was that authorities lacked the means to take effective action, he added. | The major lesson of the finance crisis was that authorities lacked the means to take effective action, he added. |
| Mr King said the bank could not continue acting "like a church" whose congregation "ignores its sermons", but said it was not entirely clear how the Bank would be able to discharge its new statutory responsibility. | Mr King said the bank could not continue acting "like a church" whose congregation "ignores its sermons", but said it was not entirely clear how the Bank would be able to discharge its new statutory responsibility. |
| "Like the church, we cannot promise that bad things won't happen to our flock - the prevention of all financial crises is in neither our nor anyone else's power, as a study of history or human nature would reveal." | "Like the church, we cannot promise that bad things won't happen to our flock - the prevention of all financial crises is in neither our nor anyone else's power, as a study of history or human nature would reveal." |
| But warnings were unlikely to be effective when people were being asked to change behaviour which appears to be highly profitable, he added. | But warnings were unlikely to be effective when people were being asked to change behaviour which appears to be highly profitable, he added. |
| At the same event, the Chancellor said he had no plans to fundamentally change the oversight of finance firms. | At the same event, the Chancellor said he had no plans to fundamentally change the oversight of finance firms. |
| This came in contrast to plans unveiled earlier on Wednesday by US President Barack Obama, which involved the most significant reform of finance regulation since the 1930s Great Depression. | This came in contrast to plans unveiled earlier on Wednesday by US President Barack Obama, which involved the most significant reform of finance regulation since the 1930s Great Depression. |
| The BBC's business editor Robert Peston said the comments by Mr King are bound to be seen as an attack on the Chancellor because "the Treasury has resisted significant changes to the allocation of regulatory responsibilities between the Financial Services Authority, the Treasury and Bank of England". | The BBC's business editor Robert Peston said the comments by Mr King are bound to be seen as an attack on the Chancellor because "the Treasury has resisted significant changes to the allocation of regulatory responsibilities between the Financial Services Authority, the Treasury and Bank of England". |
| The Treasury has resisted significant changes to the allocation of regulatory responsibilities Robert Peston, BBC business editor Robert Peston's blog | The Treasury has resisted significant changes to the allocation of regulatory responsibilities Robert Peston, BBC business editor Robert Peston's blog |
| 'Too big' | 'Too big' |
| Mr King outlined the problems of the finance sector, saying it had become too "big and too highly leveraged". | Mr King outlined the problems of the finance sector, saying it had become too "big and too highly leveraged". |
| "One important practical step would be to require any regulated bank itself to produce a plan for an orderly wind down of its activities," he said. | "One important practical step would be to require any regulated bank itself to produce a plan for an orderly wind down of its activities," he said. |
| He said whatever the shape and rules governing the finance system long term, "change was necessary". | He said whatever the shape and rules governing the finance system long term, "change was necessary". |
| "Is some banks are thought to be too big to fail, then, in the words of a distinguished American economist, they are too big." | "Is some banks are thought to be too big to fail, then, in the words of a distinguished American economist, they are too big." |
| Rules | Rules |
| But in contrast, the Chancellor said the current regulatory system was not to blame for the credit crunch, but instead pointed to the heads of financial institutions. | But in contrast, the Chancellor said the current regulatory system was not to blame for the credit crunch, but instead pointed to the heads of financial institutions. |
| Alistair Darling: "We cannot go back to business as usual" | Alistair Darling: "We cannot go back to business as usual" |
| The banking system, which includes a tripartite system, with the Treasury, Bank of England and Financial Services Authority (FSA), has been widely criticised for failing to prevent excessive risk taking at banks. | The banking system, which includes a tripartite system, with the Treasury, Bank of England and Financial Services Authority (FSA), has been widely criticised for failing to prevent excessive risk taking at banks. |
| But Mr Darling said: "The solution is not as simple, as some suggested, as restricting the size of banks", adding that smaller institutions could also threaten the financial system. | But Mr Darling said: "The solution is not as simple, as some suggested, as restricting the size of banks", adding that smaller institutions could also threaten the financial system. |
| While the banking system has been helped by increasing capital and isolating their impaired assets, more needed to be done, notably to increase the availability of credit - an essential tool for economic recovery. | While the banking system has been helped by increasing capital and isolating their impaired assets, more needed to be done, notably to increase the availability of credit - an essential tool for economic recovery. |
| Looking ahead, he said a change of culture was required and the focus had to be long-term wealth creation, not short term profits. | Looking ahead, he said a change of culture was required and the focus had to be long-term wealth creation, not short term profits. |
| He said staff needed to be "rewarded for long-term success, not for failure". | He said staff needed to be "rewarded for long-term success, not for failure". |