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| Version 0 | Version 1 |
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| King faces new grilling over Rock | King faces new grilling over Rock |
| (10 minutes later) | |
| Bank of England governor Mervyn King is set to face questioning about his handling of the Northern Rock crisis. | Bank of England governor Mervyn King is set to face questioning about his handling of the Northern Rock crisis. |
| He will appear before MPs on the Treasury Select Committee which is looking into the events which led to a run on the bank. | He will appear before MPs on the Treasury Select Committee which is looking into the events which led to a run on the bank. |
| There are reports that the Treasury is looking at plans to limit the Bank of England's powers in such situations. | There are reports that the Treasury is looking at plans to limit the Bank of England's powers in such situations. |
| Officially the government is backing the governor, with a spokesman saying he was doing "a first class job". | Officially the government is backing the governor, with a spokesman saying he was doing "a first class job". |
| However, weekend newspaper reports suggested that there was rift between the governor and Chancellor Alistair Darling | However, weekend newspaper reports suggested that there was rift between the governor and Chancellor Alistair Darling |
| There are things going on in the markets that require immediate attention rather than sitting around waiting for a select committee to make a recommendation Irwin Stelzer | |
| Under the current tripartite system the Bank of England governor, the chancellor and the head of the Financial Services Authority are supposed to work together. | |
| But an article in the Sunday Times by Irwin Stelzer quoted a senior Bank of England source saying that Alistair Darling and Gordon Brown were "unable to focus because morale throughout the government is so low". | But an article in the Sunday Times by Irwin Stelzer quoted a senior Bank of England source saying that Alistair Darling and Gordon Brown were "unable to focus because morale throughout the government is so low". |
| Mr Stelzer told the BBC: "The one thing Gordon Brown was always famous for was understanding a situation, especially an economic situation, and reacting quickly and positively and that doesn't seem to be happening. | Mr Stelzer told the BBC: "The one thing Gordon Brown was always famous for was understanding a situation, especially an economic situation, and reacting quickly and positively and that doesn't seem to be happening. |
| "There are things going on in the markets that require immediate attention rather than sitting around waiting for a select committee to make a recommendation." | "There are things going on in the markets that require immediate attention rather than sitting around waiting for a select committee to make a recommendation." |
| Slow to react | |
| The committee is considering criticism that the Bank of England was slow to react to problems at Northern Rock and should have done more to calm financial markets during the subsequent weeks. | The committee is considering criticism that the Bank of England was slow to react to problems at Northern Rock and should have done more to calm financial markets during the subsequent weeks. |
| Before speaking to Mr King, the committee heard from the trade associations of banks and building societies. | |
| "We do support the tripartite system - the problem was in execution rather than structure," Angela Knight from the British Bankers Association told the MPs. | |
| But she said research was needed into what would have happened if action had been taken earlier. | |
| Adrian Coles from the Building Societies Association said that one role which needed clarifying which of the authorities was responsible for communicating with creditors when there was a crisis of confidence. | |
| 'Independence threatened' | 'Independence threatened' |
| The shadow chancellor George Osborne has accused the government of briefing against Mr King. | The shadow chancellor George Osborne has accused the government of briefing against Mr King. |
| Mr Osborne said the Conservatives believed that the Bank of England rather than the Treasury should have greater powers to be able to step in to control problems similar to those which befell Northern Rock. | Mr Osborne said the Conservatives believed that the Bank of England rather than the Treasury should have greater powers to be able to step in to control problems similar to those which befell Northern Rock. |
| He said plans being considered by the chancellor to take more powers to the Treasury would threaten the independence of the Bank of England. | He said plans being considered by the chancellor to take more powers to the Treasury would threaten the independence of the Bank of England. |
| Northern Rock was plunged into crisis earlier this year when problems on the world's credit markets forced it to seek emergency funding from the Bank. | Northern Rock was plunged into crisis earlier this year when problems on the world's credit markets forced it to seek emergency funding from the Bank. |
| It is now being kept going by a loan of at least £25bn from the Bank and is seeking bidders to rescue it. | It is now being kept going by a loan of at least £25bn from the Bank and is seeking bidders to rescue it. |
| The Liberal Democrats have argued that Northern Rock should be nationalised temporarily, saying plans to sell the bank will not work. | The Liberal Democrats have argued that Northern Rock should be nationalised temporarily, saying plans to sell the bank will not work. |