Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Bank's report on Barings delayed


Financial Editor

The inquiry by the Bank of England into the collapse of Barings has been delayed for a second time.

The Treasury confirmed yesterday that the findings of the official inquiry would finally be made public in mid-to-late July.

A Bank of England spokesman said a full report would be passed to Kenneth Clarke, the Chancellor, in early July. There has been considerable criticism of the time taken over the investigation, and the slippage in the completion date.

Shortly after Barings collapsed in late February, the Bank informed ING, the new Dutch owner of the merchant bank, that the inquiry would take six to eight weeks.

Later, Eddie George, the Bank's Governor, told the Commons Treasury Committee that the target date had shifted to early June. This has now been put back again to July.

But the Bank said yesterday that instead of issuing two reports, the first on how the collapse occurred, followed by another on the lessons to be learnt, it now intended to compress them into a single report. It appears that nothing could have been published until the second report had been handed to the Treasury, which would have delayed the process until the autumn.

"There is no doubt that the Treasury and the Bank of England have responded to considerable public pressure to get this report into the open," said Alastair Darling, Labour's City spokesman, who will be writing to the Chancellor today to make sure the report is made public before Parliament goes into summer recess in late July.

"We are fairly confident that we will be able to release the report to Parliament before it breaks for summer," a Treasury spokesman said. It is most important the report is issued when Parliament is sitting, because only then will it enjoy parliamentary privilege. This is needed to give the Bank protection from any possible claims from aggrieved individuals named in the report.

If the Treasury does not manage to publish before late July, this would mean a further delay until the House resumes sitting in mid-November after the party conferences.

The fact-gathering by the Bank is now complete. The delay into July will be taken up showing individuals named in the report those passages relevant to them, and with completing the part on the lessons to be learnt by other banks and the regulatory authorities.

ING yesterday announced the first stage of the integration of its businesses, saying that Barings would now assume responsibility for all of the group's securities business in the US and UK.

This means about 600 ING staff in the US and about 60 in London will come under the Barings umbrella.

ING said it wanted to recruit a personality with a high City profile to head Barings investment bank when the restructuring was complete.

Comment, page 33