BoE's King says banking reform should not be rushed

(adds comment on deposit protection scheme) LONDON (Thomson Financial) - Bank of England governor Mervyn King said Monday that reform of the banking sector to prevent fall-outs like the Northern Rock debacle last year should not be rushed. Appearing before the influential Treasury Select Committee, King highlighted that it would be a 'mistake to rush' just to meet deadlines. Additionally, King said there is still a long way to go in drawing up the nature of the special resolution regime: 'There is a lot of detail still to be discussed.' King said the ultimate responsibility of keeping banks in line rests with the Financial Services Authority and not the central bank. 'We will not be pulling the trigger, we can only make recommendations.' However, King noted that he would have preferred that the central bank also had the power to pull the trigger. 'It is not the one I would have chosen...we lost the argument,' he said of the way things stand now. Turning to the deposit protection scheme which under new proposals will guarantee savings up to 50,000 pounds, King said he would prefer that banks 'prefund' the scheme. 'An element of prefunding would be desirable,' he added. [email][email protected][/email] rar/ss/ajb COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.