[DEBATE] : UK - Brown praise for Bank's governor
Riaz K. Tayob
riazt at iafrica.com
Mon Sep 24 00:11:32 BST 2007
Brown praise for Bank's governor
Prime Minister Gordon Brown has praised the performance of Bank of
England Governor Mervyn King in the wake of the Northern Rock crisis.
Although Mr Brown stopped short of giving Mr King his backing for
another five-year term as governor, he said Mr King had done a
Mr Brown's comments come after Mr King has faced intense criticism over
his handling of Northern Rock.
Critics say Mr King didn't act quickly enough to help the lender.
Speaking to the BBC's Andrew Marr, Mr Brown said he was proud of the
Bank of England's performance since Labour came to power in 1997 and
gave the Bank responsibility for setting interest rates.
"We've had 10 years where we've had stability, Mervyn King was deputy
governor under the regime of Eddie George and is now governor," said the
This is the equivalent of the wreck of a city after an earthquake
BBC business editor Robert Peston
Last week Mr King told the Treasury Select Committee that it would have
been "irresponsible" for the Bank to have intervened earlier to save
Yet he admitted he might have got the balance wrong when the run against
Northern Rock started.
From initially doing nothing to aid Northern Rock, the Bank of England
then announced that it was giving the lender an emergency loan.
Critics said the move amounted to a complete u-turn, amid speculation
that the government had pressured the Bank to intervene.
Mr King argued that he didn't take action earlier as "there was no point
in blowing up the train before it hit the buffers".
Mr King's current five-year term of office ends next June.
Separately on Sunday, newspaper reports said Northern Rock was
struggling to attract a buyer.
At least 12 of the UK and Europe's biggest banks have now decided not to
buy the Newcastle-based lender, according to the Sunday Times.
The paper says banks have estimated that it would require too much
capital - as much as £20bn - to successfully refinance Northern Rock.
Banks said to have turned their backs on a potential bid for Northern
Rock are HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB.
Story from BBC NEWS:
Published: 2007/09/23 10:31:27 GMT
© BBC MMVII
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