TSC chairman John McFall attacked FSA chairman Callum McCarthy at this morning’s meeting for not answering a number of questions about the tripartite system of governance and the roles of the respective bodies.
McFall said: “This is getting really, really unsatisfactory. It seems you are crawling into your den and not answering anything, we want to sort out this issue, we need to know what one of the eminent authorities thinks.”
McFall also confronted McCarthy with the accusation FSA “spinners” briefed against the Bank of England in an article that appeared in the Financial Times the day governor Mervyn King gave evidence to the TSC.
McFall said he has been told by journalists that the FSA “spinners were out” but McCarthy said he did “not recognise this statement”.
McCarthy pledged to fire any FSA staff that were found to have been briefing against the bank.
McFall requested that McCarthy and chief executive Hector Sants consults with the FSA press office over the story, talking to all staff who briefed journalists in September.
McCarthy refused to answer whether he thought the Bank of England should have pumped increased liquidity into the markets to avert the crisis. However Sants told MPs that looking “narrowly” at the Northern Rock issue, if liquidity in smaller amounts had been made available the lender of last resort facility may not have had to be applied.
Labour MP Sion Simon accused McCarthy of being the Sugar Ray Leonard of financial services as he proved to be a “world class ducker and diver” during the meeting.
McFall said: “The tripartite system worked in your opinion and everyone played their part, so the question I have in the light of the first bank run in 140 years is if that is success what is failure? You are telling me the tripartite system works when you had the biggest cock-up for 140 years.”