In an interview with Channel 4 News, Lord Turner told the programme the FSA, the Bank of England and the FSA had been following B&B’s situation for some months and all agreed that action had to be taken.
He said: “What became obvious at the end of last week was that a purely private sector solution was unlikely to be available rapidly enough and the situation was beginning to deteriorate”.
When questioned why Bradford and Bingley bosses had been offering assurances to their customers last week, Lord Turner said: “issues to do with funding can of their nature keep on changing over time.”
Lord Turner said the intervention was required because the FSA had decided that B&B was beginning to break its ‘threshold conditions’ required to continue operations and to take in new deposits.
He explained: “We have to have a point were we say, looking forward we are not confident of that being the case and therefore we have to stop it taking on new business. Once you’ve got to that stage, you’ve then got to try and have a solution in place. And the situation was there were contingency plans for what we would do if it got to that situation”.
Pushed on any differences with Northern Rock, Lord Turner said:
“Compared with the Northern Rock situation, lessons had been learned. There were also legal powers available to the authorities which didn’t exist at the time of Northern Rock. And therefore we have been to a much greater extent, able to prevent there being and an actual panic situation of queues in the street…and also we have been able over a weekend, to end up with a clear solution which is in place”.