FSA criticised over Northern Rock crisis

Hector Sants, chief executive of the FSA, and Callum McCarthy, chairman of the FSA, both appeared before the Committee today as part of its investigation into Britain’s first bank run in over 100 years. Sants says the FSA incorrectly thought Northern Rock had a very low probability of getting into trouble and says the FSA’s ‘stress test’, which assesses how an institution would cope in cases of market turmoil, has problems that were not picked up. The FSA’s last full review of Northern Rock took place in February 2006, while the stress test took place in July 2007 The select committee is...