The FSA has not sacked a single member of staff over the failed supervision of Northern Rock it was revealed today.
Speaking to the Treasury Select Committee in Westminster, FSA chief executive, Hector Sants also revealed that staff bonuses were not cut despite the major failings of the regulator.
Sir Callum McCarthy, chairman of the FSA, told the Committee that not one of the regulator's 2,600 staff had been dismissed for failing to supervise Northern Rock, which caused the first British bank run for over 100 years.
Michael Fallon MP, sub-chairman of the Committee, responded by saying: “Sir Callum don't you think it would have been an acknowledgement of the extent to which you recognise the failures in Northern Rock and the confidence you want to give everybody in claiming new powers, if at least one person had been dismissed?”
The Select Committee also questioned whether the FSA should have new powers given the lack of confidence in its ability to regulate the banking industry.
It was also revealed that the FSA’s staff received equivalent bonuses in 2007 as they did in 2006, despite the major failings identified.
Sants said bonuses as a percentage of staff salaries in 2007/08 were the same as in previous years. He says the decision was made by the board on the recommendations of FSA executives.
The grilling is one of the worst faced by the FSA since the Northern Rock crisis broke in September last year.
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A question of selectivity
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