Topical Questions

Part of Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 10 July 2008.

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Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer 10:30, 10 July 2008

My hon. Friend is right. As I said earlier, if some of the banks—especially some of those in the US—had had a better idea of the basis on which they were lending, and of the fact that some of the people to whom they were lending money were not in a position to repay it when interest rates increased, they would not be in their present difficulties. It is important for any institution, wherever it is—the US, here or anywhere else—to ensure that it knows what it is doing when it lends money. It is also important to ensure that the regulators have in place a regime that ensures that companies are properly focused on the risks to which they might be exposed. In this country, we are in discussions with lenders to try to ensure that the difficulties that some people face are dealt with properly. The general point that my hon. Friend makes about ensuring that institutions are properly alive to the risks to which they may be exposed is very important.