FSA officials quit

Grovelawn Financial News 19/03/2008

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Officials involved in the NR saga quit

The Freedom of Information Act has allowed The Times newspaper access to information regarding the key staff involved at the FSA during the Northern Rock crisis. It shows that most of the seven key officials have left the FSA, none have been dismissed as they have not been paid compensation for loss of office.

Part of the business of the FSA is to ensure that UK banks are in a strong financial position and this inlcudes sufficient liquidity to continue trading. The FSA, therefore, came under a barrage of critisim when it was revealed that it failed to spot the fatal flaw in Northern Rock's business model as it relied heavily on wholesale money markets for its funding, a disaster when the credit crunch took hold and money was no longer available to buy. The situation led to the first run on a British bank in a hundred years.

The report will not reveal all aspects of the FSA's dealings as it will still need to protect its employees legal rights. The turnover of staff at the FSA is reported to be one of the reasons why the Northern Rock's precarious financial position was not picked up earlier

← Banks to inject billions into economy | News For March 2008 | Rate cut pressure for Brown as working group emerges →

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