FSA slammed in Rock report

City watchdog the FSA failed to spot the flaws in Northern Rock’s business
model and did not encourage the bank to diversify its funding, a long-awaited
report by the Treasury Committee is expected to say.

According to the FT, people who have seen the final text of the
report say the FSA comes in for the most criticism, although the Bank of England
and chancellor Darling also come in for criticism.

The report says complacency, lack of communication and clumsy decision-making
between the Treasury, the Bank of England and the FSA played a role in the
problems that beset Northern Rock.

The Northern Rock board is also taken to task and heavily criticised for its
failed business model.

The report will be officially released on Saturday.

Further reading:

Former Swiss Re FD lined up as Northern Rock

Rock’s status in the balance

Related reading