FSA under fire over Northern Rock
The UK Financial Services Authority (FSA) has admitted that inadequate supervisory practices were partly to blame for the Northern Rock liquidity crisis
LONDON – The FSA has been asked tough questions by the UK Treasury Select Committee over its handling of the Northern Rock crisis. Sir Callum McCarthy, chairman of the FSA, says the Authority has not failed in its supervisory duties and that it was “nearly impossible” to predict the consequences of the credit crunch. However, he admits its stress tests failed to include the possibility of a general crisis in the credit markets.
“We did not perform to my satisfaction with the stress-testing
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