Public must be protected says Cable as report into Northern Rock is published

3.00.00pm UTC (GMT +0000) Fri 25th Jan 2008

The Treasury select committee will tomorrow highlight a catalogue of errors by the government and regulators in their handling of the Northern Rock crisis in a damning report on the bank's near-collapse. The committee will make a series of recommendations for reform of the UK's system of financial regulation and is also expected to expose the failings of the Northern Rock board and question why it was allowed to stay in place for several months after triggering the first run on a British bank in 140 years. The Liberal Democrats have written to the Chancellor warning of the dangers of the proposed rescue deal for Northern Rock, warning that taxpayers could lose out if the Government does not ensure that guarantees are able to cover any of the bank's losses.

Vince Cable, Liberal Democrat Shadow Chancellor "The devil is in the detail of the Government's rescue plan. It is essential that ministers are not given the weakest of Northern Rock's assets as security, such as the £8 billion unsecured loans, and that the Treasury has full recourse against the bank. New buyers must also not be allowed to hide from their obligation to depositors under FSA rules by inventing some dodge to a commitment of less than 15% of the shares."