Leader of the Conservative Party David Cameron says the FSA lacks expertise in key areas and should not be in charge of rescuing banks.
Meanwhile the Liberal Democrat Party says those responsible for failing to properly regulate Northern Rock should be held to account.
During Prime Minister’s Question Time today, Cameron said the Bank of England should be responsible for rescuing banks due to a lack of expertise at the FSA.
He also accused the Government of ‘dithering’ over the crisis, compared with the rapid response of the US Fed over the crisis at Bear Stearns.
Liberal Democrat shadow chancellor Vince Cable also criticised the regulator and said those responsible for the failure of Northern Rock should be held accountable.
“Regardless of the credit crunch, it is clear that Northern Rock’s business model was unsustainable in all but the most benign of environments, and the FSA should have realised this,” he says.
“Individuals who were directly responsible for these failures must be held to account.”
Cable also claims increased staffing is not the answer to the FSA’s problems.
He says: “Simply asking for more staff is not the answer, we need intelligent regulators not legions of box tickers – quality not quantity.”
Earlier today, the FSA announced it would increase its supervision of major financial institutions, as well as putting in place a team to ‘supervise the supervisors’.
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