Who is to blame for Northern Rocks near collapse?
MPs yesterday grilled the chairman and chief executive of the Financial Services Authority, Sir Callum McCarthy and Hector Sants, about what part they played and why they believe the problems at Northern Rock descended into disaster. After almost two hours of questioning it emerged the FSA believed the first run on a British bank in more than a century could not have been envisaged and while there are lessons to be learned, the tripartite system of regulation with the Treasury and the Bank of England worked well. Did MPs accept these arguments? No. Several MPs said the FSA had failed to monitor the bank closely and allowed it to lend wildly and rely on fancy derivatives to finance its loans. Mr Sants said its lending was similar to other banks, but he agreed the regulator should have been more forceful in its dealings with Northern Rock after it saw the bank relied heavily on securitising its mortgage loans with other financial institutions. Did the FSA want to rescue Northern Rock? It
