Bank in dock over Barings

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The Independent Online
THE Bank of England was in a state of siege at the weekend, as critics awaited its report, due on Tuesday, on the collapse of Barings, the merchant bank.

Officials at the Bank ducked reports that one of the top six executives in the supervision department had resigned rather than be fired as the Bank's scapegoat. "We have no comment one way or another until the Barings report is published," a spokesman said.

The unnamed central banker is the first official victim of the crisis, although 23 Barings executives have left their jobs since the merchant bank was rescued by ING, the Dutch bank.

The Bank of England also refused to break cover when the Labour Party warned it was gearing up for a serious assault if the Bank glossed over its role in Barings' pounds 860m collapse in February.

The Bank, through the Board of Banking Supervision, is in the awkward position of having to investigate itself for its regulation of Barings.

Labour's City spokesman, Alastair Darling, said a report that criticised the merchant bank's management and derivatives trader Nick Leeson - but downplayed the Bank's role as regulator - would not be acceptable.

"It will not be enough to point to the failings of Barings bank," said Mr Darling. "We need to discover what went wrong at the supervisory level."