King defends actions in Rock turmoil

6 November 2007

Mervyn King has moved to defend his actions in the handling of the Northern Rock crisis in an interview with the BBC.

In an interview, the Bank of England boss said that injecting liquidity into the market would not have prevented the turmoil at the lender.

But Mr King did acknowledge that lessons needed to be learnt from the events that led up to the run on the bank.

With hindsight he felt that the central bank should have pressed for harder legislation and communicated sooner regarding the problems building in the financial markets.

"We would have done many things differently," said King.

He also said that the decision to offer the emergency funding facility to help the first run on a British bank in 140 years was motivated by worries over systemic risk.

Problems at the bank continued yesterday as the share price lost 6.5 per cent as it emerged that the bank's borrowing had reached almost £23 billion.

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