The Financial Services Authority will tomorrow admit to a catalogue of errors in its handling of the Northern Rock crisis, The Telegraph reports.
An internal review will detail faults, including putting insufficient pressure on the Rock board, and make recommendations on improving the monitoring of banks.
However, sources said it was unlikely to call for a probe into the conduct of Northern Rock directors or share sales by the then chief executive of the bank, Adam Applegarth.
MPs have criticised the Government for allowing the FSA to investigate itself. But John McFall, chairman of the Treasury Select Committee, said yesterday: "In our report, the FSA was seen to be very much at fault in supervising the bank. However, I am content that they have looked at their procedures and come out with views on improving processes."
THE PREMIERS OF both the UK and France are to demand that banks disclose all their bad debts, which could amount to a staggering $600bn (£302bn), five times the sum already written off since November, in a bid to bolster confidence in the floundering financial markets, according to The Independent.
Gordon Brown and the French President, Nicolas Sarkozy, are to hold a summit in the UK on Thursday, and will use it to pile pressure on the banks in a bid to clarify some of the uncertainty damaging confidence in the current climate.
An official at No 10 said that the two leaders would call for "greater transparency in financial markets and, as a first step, full and immediate disclosure of the scale of write-offs by banks."
THE NOBEL PRIZE-winning economist Joseph Stiglitz has blamed the "unconscionable" system of generous bonuses paid to investment bankers for exacerbating the global credit crisis, The Independent also reports.
"The system of compensation almost surely contributed in an important way to the crisis," said Professor Stiglitz, a former chairman of the President's Council of Economic Advisers, under Bill Clinton.
"The system was designed to encourage risk taking – but it encouraged excessive risk taking. In effect, it paid them to gamble. When things turned out well, they walked away with huge bonuses. When things turn out badly – as now – they do not share in the losses."
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