Rock: A lesson for FSA
THE City regulator has acknowledged it needs to improve its monitoring in the wake of the Northern Rock crisis.
Bosses at the Financial Services Authority (FSA) admitted “lessons had to be learned” after the run on the bank last month.
They told MPs on the Treasury Select Committee Northern Rock had not been due a full risk assessment until three years after its last one, conducted between December 2005 and February 2006.
While specific issues were addressed with the bank on a more regular basis, chief executive Hector Sants said the FSA was reviewing its procedures in response to the fiasco.
“There are lessons to be learned here, with regard to our supervisory capacity,” he told the committee.
Mr Sants went on to say the FSA had predicted Northern Rock - before it ran into credit problems requiring financial support from the Bank of England - to have a “low” probability of getting into trouble.
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