DUBLIN (AFP) -- The global credit crisis which hammered British lender Northern Rock was partly sparked by ""irresponsible lending"" on financial markets, EU Internal Markets Commissioner Charlie McCreevy said Friday.

The former Irish finance minister argued that Europe must learn from the credit debacle and the plight of Northern Rock, which saw the first British bank run in living memory last month.
McCreevy's comments came in a speech due for delivery at the opening of the European headquarters of U.S. bank Wachovia in Dublin on Friday.
""Irresponsible behavior: Irresponsible lending, blind investing, bad liquidity management, excessive stretching of rating agency brands, defective value at risk modeling pose questions for a much wider audience,"" McCreevy said.
Since early August, world financial markets have been rocked by a global credit squeeze, which resulted in a funding crisis for Northern Rock.
Commercial banks have become very nervous about lending cash to each other amid fears over possible exposure to the U.S. housing market slump, meaning that liquidity has tightened sharply, creating sometimes severe problems for those needing cash to fund their operations -- as in Northern Rock's case.
""The financial turbulence of the past four months has provided salutary lessons for everyone involved in global financial markets,"" McCreevy said.
""It is especially -- indeed sometimes only -- in turbulent times that regulation and its effectiveness gets tested.
""And we cannot, and should not, bury our heads in the sand or ignore the fact that there have been some aspects of our regulatory framework -- both at member state and European level -- that are likely to need improving.""
Turning to Northern Rock, McCreevy argued the case for more behind-the-scenes action to avoid another run on a European bank.
""In appropriate circumstances, transparency has a useful role to play; for example, when it comes to dealing with opaque financial instruments,"" he said.
""But I have always been of the view that when the stability of a financial institution is at risk, the situation is best resolved behind closed doors.""
Northern Rock ran into serious trouble sourcing credit in September when it requested financial help from the Bank of England (BoE) -- and faced the first run on a British bank in living memory.
The clamor to withdraw savings died down after the British government stepped in to guarantee all existing and new deposits at Northern Rock.
""Unfortunately, in recent weeks, gold-plated transparency rules stood in the way of the quiet resolution of a problem before it became a crisis,"" McCreevy said.
""The result was that transparency rules that were intended to underpin investor confidence, when put to the test, actually promoted investor panic.
""Panic that culminated in a bank run -- averted only by a central bank lifeboat which in turn spread moral hazard throughout the system.""
McCreevy added: ""Clearly transparency that culminates in panic, followed by a rescue, followed by the proliferation of moral hazard, is transparency that we would be better off without.""