Northern Rock and Banking Reform

Yes. There has been a lot of discussion about the complexity of the products and whether people understand them. If people are not prepared to undertake the necessary scrutiny and due diligence, there is still an over-reliance on those assessments. The health warning that those ratings are just one measure has fallen on deaf ears, which is one reason why the credit rating agencies should be examined more carefully. On the liquidity rules, Northern Rock ticked all the boxes on liquidity, which is 5 per cent. or five days' business falling due. I am concerned that the measure is not adequate, and we should revisit the issue. Other banks have similar liquidity profiles, albeit that they are not so reliant on the wholesale financial market, which was Northern Rock's problem. If we are to implement a regime that minimises the likelihood of the Northern Rock situation being repeated, we must re-examine the rules and requirements on liquidity. However, we cannot do that on our own, and I would be grateful if the Financial Secretary discussed progress in the international discussion. On the future of regulation, big changes are taking place, which should produce lighter-touch regulation—so-called principles-based regulation. I hope that there will be careful oversight as we move towards that, because I have some qualms whether that approach will provide the rigorous scrutiny and detailed management that is needed given the current rather turbulent times. I repeat that the Government were right to consider the private sector options before going for nationalisation. As the process moves forward, I hope that we achieve a realistic and rational discussion about Northern Rock and its future and learn some of the hard lessons spelled out in the report, which will ensure that the chances of a future Northern Rock are kept to the absolute minimum and that our constituents feel more secure in their finances and more confident about the financial and banking system.