The House of Commons' powerful Treasury Committee will quiz the Governor of the Bank of England and the heads of the Financial Services Authority this month The Independent reports.
The committee will question Mervyn King, the Bank of England's Governor, and the deputy governor for financial stability, Sir John Gieve, on 20 September. Likely subjects for questions will include the Bank of England's emergency credit facility, the role of the credit rating agencies, and the stability of the financial system.
"We will ask how the emergency facility is being used, what the Bank's view of liquidity is, how we got into this position, and what reassurances the Bank can provide as to the stability of the entire system," Michael Fallon, the senior Conservative member on the committee, said.
Sir Callum McCarthy, chairman of the FSA, and Hector Sants, the regulator's new chief executive, will appear before the committee in October for a scheduled meeting, and the committee will take the opportunity to ask them about the FSA's supervisory role in the crisis.
THE COST TO banks of borrowing money over a three-month period hit a near-ten-year high yesterday as Britain’s biggest financial institutions searched for medium-term funding to help them to ride out the turbulence in the credit markets, according to The Times.
The London interbank offered rate (Libor) for three-month sterling reached 6.74 per cent, beating last Friday’s record. It is the highest since the Long Term Capital Management hedge fund crash sent shivers through markets in December 1998.
Barclays disclosed that it was paying the highest rate of all banks for three-month money, estimating that it would cost the bank 6.8 per cent – more than the Bank of England’s 6.75 per cent penalty rate – to borrow sterling.
BRITAIN'S MANUFACTURING SECTOR is shrugging off the interest-rate gloom affecting consumers and enjoying its fastest rate of growth since the spurt in factory production prompted by the pound's exit from the Exchange Rate Mechanism 15 years ago, it was revealed yesterday, The Guardian reports.
With the world economy booming, UK firms found last month that their order books were swelled by strong demand for exports in addition to robust domestic sales, the Chartered Institute of Purchasing Managers said in its monthly snapshot of industry.
The CIPS said production last month was at its highest since the period when the sharp devaluation in the value of the pound after Black Wednesday in 1992 made UK goods cheaper to buy in global markets. Order books and employment remained strong, with firms reporting upward pressure on prices.
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