Vince Cable has rebuked the FSA’s claim by that the Northern Rock debacle may still have arisen regardless of any FSA involvement as a “total cop out”.
The Liberal Democrat’s shadow chancellor has also called on the Financial Services Authority to commit itself to achieving higher standards in the future following its admission of shortcomings in the handling of Northern Rock.
Cable says: “It is welcome that the FSA has had the courage to admit that it failed to adequately regulate the actions of NR, though the reality is that it had little choice.
“However, trying to claim that the crisis may have arisen anyway, even if it had dealt with the problem properly, is a total cop out.
“It is critical that the FSA sets itself higher standards in the future. Not only should it be alert to known dangers, but it should also investigate the impact and risk of new business practices.
“Simply asking for more staff is not the answer, we need intelligent regulators not legions of box tickers – quality not quantity.”
Cable adds that continued instability in financial markets highlights the continued inability of our regulators to deal with the economic cycle and says that the FSA should be working with the City to ensure that it controls lending in boom periods to mitigate the impact of downturns.