The Financial Services Consumer Panel says independent auditors could have widened the scope of the Financial Services Authority’s internal review.
While it congratulates the FSA for facing up to its shortcomings, it says independent auditors could have provided a valuable wider perspective.
John Howard, panel chairman of the FSCP, says: “The FSA concludes that even if
supervision had been acceptable it was by no means the case that that would have changed the outcome.
This suggests to me that the events surrounding the failure of Northern Rock, including the sudden collapsein credit markets, were testing the limits of regulation anyway.
“No regulator can guarantee to prevent all failures. In those circumstances, a realistic compensation scheme which pays out quickly is vital to prevent another bank run.”