Mervyn King, governor of the Bank of England, has claimed the UK's regulatory framework is not up to the job of managing the financial system, as he faced a latest round of questioning for the Treasury Select Committee's investigation into financial stability in the wake of the credit crisis.

In a UK Treasury Select Committee meeting this morning, King said the peculiarities of the UK's insolvency and deposit insurance framework had exacerbated the impact of the run on UK lender Northern Rock and that a new regime was needed to assess banks' liquidity provisions.