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| Chancellor faces MP finance panel | |
| (about 2 hours later) | |
| Chancellor Alistair Darling is to be questioned about the recent crisis at Northern Rock by the MPs that grilled the governor of the Bank of England. | |
| Chairman of the House of Commons Treasury Select Committee John McFall said he had written to the chancellor. | |
| Mr McFall has said he wants to know why the Bank of England and financial authorities failed to foresee the recent crisis which hit Northern Rock. | |
| Earlier this week Bank of England boss Mervyn King was quizzed by the panel. | |
| And executives may also be grilled by MPs over the problems that have beset the beleaguered firm. | |
| Mc McFall told the BBC that questioning key people from the market was likely if it was to "dig deep" into the issue. | |
| Separately, the government said the Treasury was considering changes to UK banking legislation. | Separately, the government said the Treasury was considering changes to UK banking legislation. |
| On Thursday, the Bank of England chief said existing laws had stopped him handling the crisis how he wanted to. | On Thursday, the Bank of England chief said existing laws had stopped him handling the crisis how he wanted to. |
| Mervyn King made the comments when he appeared before the Treasury select committee, and a spokesman for the Prime Minister said that his comments would be considered. | Mervyn King made the comments when he appeared before the Treasury select committee, and a spokesman for the Prime Minister said that his comments would be considered. |
| Bank law was a "complex issue", the spokesman added but that it was "right that all legislation is under constant consideration". | Bank law was a "complex issue", the spokesman added but that it was "right that all legislation is under constant consideration". |
| 'Searing look' | 'Searing look' |
| On Friday head of the Treasury select committee, John McFall, said that the terms of reference for the committee's probe into the UK's financial instability had yet to be fully established. | |
| But asked whether Northern Rock executives may be called to give evidence, he said: "A lot has happened in the past 24 hours but I have no doubt that if we are going to have a searing look at this issue and dig deep then we will have to look at the market." | But asked whether Northern Rock executives may be called to give evidence, he said: "A lot has happened in the past 24 hours but I have no doubt that if we are going to have a searing look at this issue and dig deep then we will have to look at the market." |
| We need to reflect and then act to prevent repetition of anxieties and concerns which I recognise and with which I sympathise Sir Callum McCarthy, FSA chairman Northern Rock's share price | We need to reflect and then act to prevent repetition of anxieties and concerns which I recognise and with which I sympathise Sir Callum McCarthy, FSA chairman Northern Rock's share price |
| Northern Rock shares fluctuated on Friday, and were trading 0.05% down 185p by mid-afternoon. | Northern Rock shares fluctuated on Friday, and were trading 0.05% down 185p by mid-afternoon. |
| The bank has seen about 70% of its value wiped out in the past week since it emerged that it had applied to the Bank of England for emergency funding. | The bank has seen about 70% of its value wiped out in the past week since it emerged that it had applied to the Bank of England for emergency funding. |
| FSA chairman Sir Callum McCarthy and chief executive Hector Sants will give evidence to the Treasury select committee next month. | FSA chairman Sir Callum McCarthy and chief executive Hector Sants will give evidence to the Treasury select committee next month. |
| The FSA has been criticised for not tackling Northern Rock's lending model before the bank hit difficulties. | The FSA has been criticised for not tackling Northern Rock's lending model before the bank hit difficulties. |
| 'Obvious risk' | 'Obvious risk' |
| The FSA appearance, scheduled for 9 October, is expected to see the watchdog challenged over whether it was fulfilling its role properly. | The FSA appearance, scheduled for 9 October, is expected to see the watchdog challenged over whether it was fulfilling its role properly. |
| "The FSA has a lot of questions to answer... about why Northern Rock wasn't identified as the most obvious risk," committee vice-chairman Michael Fallon said during Thursday's hearing. | "The FSA has a lot of questions to answer... about why Northern Rock wasn't identified as the most obvious risk," committee vice-chairman Michael Fallon said during Thursday's hearing. |
| In a speech in London on Thursday, Sir Callum said the events of the last week, which saw a run on the Northern Rock as thousands of people queued to withdraw savings, had "been sobering for all". | In a speech in London on Thursday, Sir Callum said the events of the last week, which saw a run on the Northern Rock as thousands of people queued to withdraw savings, had "been sobering for all". |
| "We need to reflect and then act to prevent repetition of anxieties and concerns which I recognise and with which I sympathise." | "We need to reflect and then act to prevent repetition of anxieties and concerns which I recognise and with which I sympathise." |
| The October select committee hearing was already scheduled but had previously been set to take evidence on the FSA's annual report. | The October select committee hearing was already scheduled but had previously been set to take evidence on the FSA's annual report. |