Treasury - Fifth Report
Here you can browse the report together with the Proceedings of the Committee. The published report was ordered by the House of Commons to be printed 24 January 2008.
Contents
Terms of Reference
Summary
1 Introduction
The conduct of our inquiry
The role of our inquiry
Our two Reports
2 Northern Rock's business model
The importance of Northern Rock in the
North East
Assets
Liabilities
The events of 2007
Responsibility for the problems at Northern
Rock
3 The regulation of Northern Rock
Northern Rock's regulation as a high
impact firm
Potential warnings
The Basel II waiver
The regulation of liquidity
Stress testing
Qualifications of senior directors
Conclusions
4 The events of August and September
The Bank of England's money market operations
until 20 September
The decisions on the "safe haven"
The support operation, the run and the guarantee
5 Dealing with failing banks
Why is it important that banks can fail?
Why banks are special
The potential role of public authorities
Who bears the risk of bank failure?
Prompt corrective action
A special resolution regime?
Critical banking functions
Lender of last resort
6 Depositor protection
Rationale for deposit protection
Co-insurance
Compensation limit
Speedy release of funds
Communication
Identifying insured depositors
Off-setting of loans and mortgages against
deposits
Funding
7 Lessons learned
Our inquiry and other reviews
The roles of the Tripartite authorities and
the overall functioning of the Tripartite arrangements
War games and lessons learnt
Leadership
Communications strategy with the public
Damage to the Tripartite authorities and
UK economy
Tripartite influence on companies receiving
support
The audit of high-risk financial institutions
8 Reforms
The Deposit Protection Fund
Regulatory powers
Quis custodiet ipsos custodes?
The limits of political control
Allocation of the new powers and their relationship
to existing responsibilities of the Bank of England
Responsibilities of the Office of the Deputy
Governor and Head of Financial Stability
Operation of the Tripartite arrangements
under the new structure
Responsibilities of the Treasury
9 Northern Rock since September
The Bank of England liquidity facility announced
on 14 September
The deposit guarantees of September and October
The additional facilities announced on 9
October
The discussions on State aid rules up to
early December
The further extension of the Government guarantee
in December
Security of the overall State commitment
Reporting and parliamentary accountability
Tripartite influence on Northern Rock's business
until December
Options for Northern Rock under consideration:
September to November
Options for Northern Rock under consideration
since December
Announcement on 21 January 2008
Conclusions and recommendations
Annex 1: Meetings during visit to Stockholm,
26-28 November 2007
Annex 2: Relevant meetings during visit to
Washington DC, 11-13 December 2007
Formal minutes
Witnesses
List of written evidence
List of Reports from the Treasury Committee
during the current Parliament
MINUTES OF EVIDENCE - VOLUME II (HC 56-II)
WRITTEN EVIDENCE - VOLUME II (HC 56-II)
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