Treasury Committee press notice no.84

Session 2006-07, 9 October 2007

Following today’s evidence session with the Financial Services Authority on Financial Stability and Transparency, the Chairman of the Treasury Committee, Rt Hon John McFall MP, has written to the Chairman of the FSA. The text of that letter is set out below.

Letter from the Chairman of the Treasury Committee to the Chairman of the FSA

1. I am writing to confirm the Treasury Committee’s additional requests for information arising from the oral evidence given by you and Hector Sants this morning. The Committee will be taking oral evidence from the Chairman and Chief Executive of Northern Rock plc next Tuesday morning and the Committee wishes to receive your memorandum replying to this letter before that meeting.

2. In relation to Northern Rock plc, you undertook to provide written evidence about-

»the information available to the FSA about Granite and the FSA’s views on the structure of Northern Rock’s special purpose vehicle arrangements, including the connection with charitable organisations;

»the communications that took place between the FSA and Northern Rock’s auditors over the last two years and the conclusions that you drew from those communications;

»the regulatory relationship between the FSA and Northern Rock prior to August 2007 and how that relationship compared with that with other businesses in the same markets;

»the discussions that took place between the FSA and Northern Rock in August and September 2007 and who conducted them.

3. You also agreed to provide further information relating to the suggestion that the FSA briefed against the Bank of England in the media in September. In doing so, it would be helpful if you could confirm that you or senior staff of the FSA have contacted all relevant staff of the FSA who briefed journalists in September and that they have all confirmed that they did not undertake briefing against the Bank of England.

4. As we discussed, please also provide the dates of each meeting of the Risk Committee of the FSA since April 2006, indicating the dates of those meetings which were not attended by Sir John Gieve.

5. Finally, you undertook to clarify the information sought from regulated businesses about liquidity prior to August 2007 and the information sought since then and the nature of the changes that you have made to your practice.

6. In view of the wide public interest in these matters, I propose to make the text of this letter available to the media this afternoon.

7. I look forward to receiving your further written submission.

1. Committee Membership is as follows: Rt Hon John McFall (Chairman), Mr Graham Brady, Mr Colin Breed, Jim Cousins, Angela Eagle, Mr Philip Dunne, Mr Michael Fallon (Sub-Committee Chairman), Ms Sally Keeble, Mr Andrew Love, Mr George Mudie, Mr Siôn Simon, John Thurso, Mr Mark Todd, Peter Viggers.