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| Version 9 | Version 10 |
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| Chancellor faces MP finance panel | Chancellor faces MP finance panel |
| (10 minutes 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. | 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. | 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. | 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. |
| Executives at the beleaguered banking firm may also be grilled by MPs. | Executives at the beleaguered banking firm may also be grilled by MPs. |
| Possible new legislation | Possible new legislation |
| Mr McFall told the BBC that questioning key people from the market was likely if it was to "dig deep" into the issue. | Mr McFall told the BBC that questioning key people from the market was likely if it was to "dig deep" into the issue. |
| 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 |
| 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, Bank of England chief Mervyn King told the committee that existing laws had stopped him handling the crisis the way he had wanted. | On Thursday, Bank of England chief Mervyn King told the committee that existing laws had stopped him handling the crisis the way he had wanted. |
| The British Bankers' Association (BBA), which represents the UK's commercial banks, has also called for a review of banking regulation. | |
| Angela Knight, BBA chief executive, said the existing process by which the Bank of England comes to the rescue of a struggling lender failed to appease customers. | |
| About 70% has been wiped off the value of Northern Rock's shares in the past week since it emerged that it had applied to the Bank of England for emergency funding. | About 70% has been wiped off the value of Northern Rock's shares in the past week since it emerged that it had applied to the Bank of England for emergency funding. |
| At the close of London trading on Friday, its share price was 194.3 pence, up almost 5% on the day. | |
| Trade union Unite, which represents Northern Rock staff, said it had now secured a guarantee from the bank that there will be no compulsory redundancies following the recent events. | Trade union Unite, which represents Northern Rock staff, said it had now secured a guarantee from the bank that there will be no compulsory redundancies following the recent events. |
| Cash influx | Cash influx |
| The unexpected run on the Newcastle lender prompted the Bank of England to announce it will pump £10bn into the banking system in an effort to cut the rate at which banks lend money to each other. | The unexpected run on the Newcastle lender prompted the Bank of England to announce it will pump £10bn into the banking system in an effort to cut the rate at which banks lend money to each other. |
| This would be the first step in unfreezing the money markets and restoring confidence in Britain's financial system. | This would be the first step in unfreezing the money markets and restoring confidence in Britain's financial system. |
| During a 30-minute auction next Wednesday banks will be able to bid for a maximum of £1.5bn and a minimum of £5m from the Bank of England to borrow for a three-month period. | During a 30-minute auction next Wednesday banks will be able to bid for a maximum of £1.5bn and a minimum of £5m from the Bank of England to borrow for a three-month period. |
| The auction will determine the rate of interest and who gets the money. | The auction will determine the rate of interest and who gets the money. |
| It will be the first of four auctions, with the others due to take place on 2,10 and 17 October. | It will be the first of four auctions, with the others due to take place on 2,10 and 17 October. |
| U-turn | U-turn |
| The drastic move is a massive U-turn on the Bank's stated policy with regard to its treatment of banks which had relied too heavily on the availability of cheap debt to grow their businesses. | The drastic move is a massive U-turn on the Bank's stated policy with regard to its treatment of banks which had relied too heavily on the availability of cheap debt to grow their businesses. |
| FSA chairman Sir Callum McCarthy and chief executive Hector Sants will give evidence to the Treasury select committee next month, and are expected to be challenged over whether the watchdog was fulfilling its role properly. | FSA chairman Sir Callum McCarthy and chief executive Hector Sants will give evidence to the Treasury select committee next month, and are expected to be challenged over whether the watchdog was fulfilling its role properly. |
| 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. |
| "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 on Friday, Sir Callum said the situation at Northern Rock had "been sobering for us all" | In a speech on Friday, Sir Callum said the situation at Northern Rock had "been sobering for us all" |
| "We need to reflect and then act to prevent repetition of the anxieties and concerns which I recognise and with which I sympathise." | "We need to reflect and then act to prevent repetition of the anxieties and concerns which I recognise and with which I sympathise." |