The Northern Rock crash was their fault, and in a moment of honesty that is rare in government, the FSA have told the rest of the world where they went wrong.
The failings were grievous:
In summary, the FSA's supervision of Northern Rock was totally incompetent. NRK could do what it wanted, and take on any risk it liked without any serious intervention from the FSA.
With such a lamentable record, it is tempting to demand some heads. Perhaps a couple of resignations would mitigate the sense of outrage that follows such a systematic and comprehensive failure. However, the temptation should be resisted.
A couple of high profile resignations might obscure and delay what really needs to be done. The FSA should be abolished and full supervisory responsibility returned to the Bank of England.