UK´s Darling Will Make Changes To Ensure Stability

British finance minister Alistair Darling said on Sunday the Northern Rock crisis last week had been difficult.

Britain will learn the lessons of the Northern Rock crisis and make whatever changes are needed to ensure anything like it does not happen again, finance minister Alistair Darling said on Sunday.

Thousands of panicked savers queued to get their money out of Northern Rock bank last week in Britain's first bank run in more than a century, following news it needed emergency help from the Bank of England.

The run only ended after the government pledged to guarantee all Northern Rock deposits, but shares in Britain's fifth-biggest mortgage lender have continued to slide and questions are being asked over who is to blame.

"Last week was difficult. Difficult for Northern Rock savers, for us all. There are lessons to be learnt -- and I will make sure that we make the changes we need to ensure stability," Darling said in his first speech to the annual Labour party conference in Bournemouth as finance minister.

A review of financial regulation is likely to be underway soon, according to government sources, as some commentators blame Britain's "tripartite" regulatory structure, set up by now Prime Minister Gordon Brown, for exacerbating the crisis.

Under the current system, the Financial Services Authority supervises the banks, the Treasury is responsible for legislation and the Bank of England for financial stability.

DEPOSIT PROTECTION

"Of course we have to look at the tripartite system, we can look at how this can flourish in the future," Brown said earlier on BBC television.

Governor Mervyn King, under fire himself for his role in managing the crisis, has said legal rules prevented him from launching a covert rescue plan for Northern Rock, a victim of the credit crunch seizing global markets.

Brown earlier made clear that King had his support, describing him as a "brilliant" governor of the central bank.

Darling said no government should be in the business of protecting executives who make the wrong decisions but savers had to be protected.

"We need to strengthen protection for ordinary savers," he said. Britain now protects up to 31,700 pounds ($63,720) of savers' money but one proposal mooted is that this could rise to 100,000 pounds.

"We need effective regulation in international markets too. Far greater openness and to prevent risky investment being hidden off the balance sheet. Effective supervision for banks, here and across the world," Darling said.

"The international instability is affecting not only us, but countries across the world. Which is why we need to work together and deal with these problems now."

The credit crunch which started with banks facing losses because of investment in risky U.S. mortgage debt has spread to markets right around the world.