Monday 10 March 2008

The FSA ignored Northern Rock before implosion

Today, the Times provided a partial insight into the conduct of the FSA and their oversight of Northern Rock. The newspaper reports that at least five officials who worked on the failed bank have now left. Of course, this sounds very much in line with that ageless tradition in the British civil Service; namely that punishment and retribution sinks to the lowest available grade.

The Times reported a second shocking fact. Northern Rock had not been the subject of a full supervisory check from the FSA for 18 months before it went bust. During that time period, the bank began offering their now infamous 125 LTV mortgages and started its mad dash for growth whereby the NRK would take over around 20percent of the mortgage market. Under such circumstances, one would have expected some kind of response from the FSA.

In retrospect, the errors are all too obvious.

2 comments:

Anonymous said...

I am waiting for a big name firing.

GBP100 billion in guarantees and no one is responsible?????

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