LONDON, March 26 (UPI) -- Bank of England Governor Mervyn King told Britain's Treasury Select Committee Wednesday he would not use aggressive interest rate cuts to rescue banks.

"Two principals would underlie any central bank role," King told the committee. "First, the risk of losses on their lending should remain with the banks' shareholders. Second, a long-term solution must focus on the overhang of assets and not subsidies issues of new assets," he said.

Mortgage finance providers "underestimated the risks, and hence the true costs of the securitization process," King said.

The Bank of England has moved to pump cash into the economy, but not by reducing lending rates, which have remained at 5.25 percent since December, The Times of London reported.

Last week, the bank initiated a series of injections of nearly $10 billion into the economy that will continue until the next meeting of the banks monetary committee.

King said, "the heart of the problem is not the real economy; it is in the financial sector itself," the newspaper reported.