The FSA has published a memorandum it has sent to the Treasury Committee. The memorandum is entitled Recent turbulence in global financial markets and Northern Rock’s liquidity crisis (the Memorandum). In the Memorandum the FSA summarises its regulatory actions over recent months, generally and in relation to Northern Rock plc. The FSA explains how it worked with HM Treasury and the Bank of England, within the Tripartite Framework, to respond to market developments and deal with problems in individual firms. The FSA also states that it has enhanced its monitoring of major market players by increasing the frequency of their liquidity and encouraging banks to take remedial action as appropriate. In the final part of the Memorandum the FSA outlines its plans to learn the lessons from recent events. This includes working with HM Treasury, the Bank of England and the Financial Services Compensation Scheme (FSCS) to broaden the framework within which the FSCS operates. This will include finding a solution for deposit protection which takes into account appropriate changes to compensation arrangements more broadly.

View Recent turbulence in global financial markets and Northern Rock's liquidity crisis, (PDF 288KB), 9 October 2007