FSA failed to properly supervise Northern Rock

The Financial Services Authority has finally admitted that there were some serious failing on behalf of the regulator with regards to the way that it dealt with the recent Northern Rock crisis in the summer of last year.

FSA officials admitted that it had failed the bank on a number of levels, mainly relating to supervision and monitoring.

Northern Rock has now been nationalised following its near collapse last year. However, since the crisis there has been a lot of criticism over how the government and the authorities, including the FSA, dealt with the crisis, and did not do enough to try and ease the situation.

The FSA has admitted to being ‘asleep on the job’ and has listed a number of failing where it thinks it went wrong with the way that Northern Rock was supervised and monitored. However, it has used this as a learning curve and has brought in a new programme so that the same mistakes are not made in the future.

An FSA official said: ‘This programme is the response of the management of the FSA to the weaknesses identified in the particular case of the supervision of Northern Rock. It is clear from the thorough reviews carried out by the internal audit team that our supervision of Northern Rock in the period leading up to the market instability of last summer was not carried out to a standard that is acceptable, although whether that would have affected the outcome in this case is impossible to judge.’