The recent credit crunch could return to the UK financial market on a renewed and intensified scale if lessons from the summer`s crisis have not been learned, the Bank of England (BoE) has warned.
In news which may be important to those in the debt consolidation process, the BoE`s financial stability report warned that the UK`s financial sector is vulnerable to further shocks after ignoring warnings of "seriously flawed" procedures used throughout the industry.
The BoE admitted that it needs to improve itself after the three-day Northern Rock crisis but said lax working practices in other areas were of much more concern.
John Gieve, BoE deputy governor for financial stability, said: "Some important lessons need to be learned by both financial institutions and authorities on liquidity risk management, valuation of complex instruments, disclosures of risk positions and on crisis management."
In September, over £2 billion was withdrawn from Northern Rock accounts after the BoE provided liquidity support for the mortgage lender.
