Chancellor pledges to learn banking crisis lessons
MPs grill chancellor Alistair Darling
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Monday, 03, Nov 2008 06:08
Lessons must be learned from the banking crisis, Alistair Darling has conceded.
The chancellor of the exchequer – banked on either side by the governor of the Bank of England Mervyn King and the head of the regulator the Financial Services Authority (FSA) Adair Turner – faced questions from the Treasury select committee.
MPs grilled the trio on the banking crisis – for the first time the tripartite authorites had ever given evidence to committee.
Some 5,000 emails with questions were emailed to the committee from the public – in another first – for the trio to answer.
The first question stated: "Why does everyone seem to be a loser?"
Mr Darling said he accepted responsibility for areas of his responsibility over the crisis – but claimed regulators only failed by not looking at international problems and only focusing on domestic problems.
"Undoubtedly there are lessons to be learned," he said.
He hit out at the boards of banks that should have been "on the front line" to protect their shareholders but claimed some did not know what they were doing as money "flooded into the system", interest rates were low and securitised investments became popular.
Lord Turner also admitted failures.
He said: "At the level of whole world there was failure to see enormous risk.
"In retrospect it is clear the world was on a boom of credit that turned out to unsustainable and raised issues of capital adequacy."