Lessons of Northern Rock must be learnt, says lord

by Richard Kilner

Story link: Lessons of Northern Rock must be learnt, says lord

Lord George, formerly governor of the Bank of England, has warned that the Northern Rock debacle lessons must be learnt by the government, financial services industry and regulators.

Lord George went on to say that he believed the credit crunch would cause borrowing costs to rise, following the re-evaluation of risks.

His comments, made to the National Association of Pension Funds, come before the Bank of England’s Monetary Policy Committee held today to discuss a possible change to interest rates.

Improved transparency and the assessment of liquidity risks are two areas of concern, he said.

Lord George also stated that depositor guarantees needed to be reassessed both for economic and social reasons.

The former governor has also called for actions to be taken after consideration, and not as kneejerk measures.