UK: Secret Bank Rescues to Be Allowed
February 1st, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Sterling holders, do you get it yet? (Some of the sterling holders on Cryptogon do. Sterling holders have made up the biggest component of BullionVault purchases in January.)
Via: BBC:
Chancellor Alistair Darling is to give new powers to the Bank of England to mount secret rescue operations for banks requiring emergency funds.
The plan will be unveiled today as part of sweeping regulatory reforms designed to prevent a repeat of the Northern Rock debacle, the BBC has learned.
He will also make the Bank of England’s loans to a troubled bank rank first in the queue of creditors.
There will be a 12 week consultation period on the new legislation.
“It’s unclear whether the devastating run on the Rock could have been prevented by the kind of clandestine help which the Bank may in future be able to provide,” said the BBC’s business editor Robert Peston.
“Such secrecy would only apply where such emergency lending is temporary and limited in nature.
“So the Treasury believes that the Rock probably needed too much money for too long for the Bank of England to be able to keep the rescue operation out of the public domain.”
