Thank you for your letter of 22 April seeking clarification of one point of evidence given to the Committee by Mr Applegarth on 16 October 2007.

  Mr Applegarth said, in response to a question, that the FSA had come to a Board Meeting "in January I think it was". According to our records, the FSA was not present at a January 2007 Board Meeting. Two representatives of the FSA, Jackie Sharp and Andy Maysey, had been present at a Board Meeting in March 2006 to explain what was involved in Northern Rock's move to "close and continuous" supervision. Ms Sharp and Mr Maysey also came to Northern Rock's offices on 30 April and 1 May 2007. This was the initial visit under the "close and continuous" supervisory regime. The FSA met Mr Applegarth (on 30 April) and other Executives. At the 30 April meeting, Mr Applegarth and the FSA did discuss Northern Rock's Business Plan.

  The above information is based on our records. We have provided this information to Mr Applegarth and he has confirmed to us that the information in this letter is correct to the best of his recollection, his memory now having been refreshed by the checking of the records. Mr Applegarth says that the meeting he had in mind was the April 2007 meeting. At the time he testified to the Committee he mistakenly thought that the meeting had taken place a little earlier in 2007 and that it had taken place at a Board Meeting. Mr Applegarth has asked us to convey his apologies for this mistake and to thank the Committee for the opportunity to set the record straight.

30 April 2008