4 September 2007, 11:54  BoE's King to be quizzed over market turmoil

The Treasury Select Committee will quiz the Bank of England governor Mervyn King and the heads of the Financial Services Authority, Sir Callum McCarthy and Hector Sants, this month about the causes of the credit crunch and the way they have handled the crisis, the Independent reports today. Key questions will reportedly centre on the BoE's emergency credit facility, the role of 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," said Michael Fallon, the senior Conservative member on the committee. Both the BoE and the FSA have remained tight-lipped during the turmoil over the last month. The Bank has not clarified why its standby credit facility was being used and the FSA has refused to discuss specific financial structures, such as collateralised debt obligations and structured investment vehicles, which have been at the heart of the recent turmoil.

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