According to a report in The Times, of the seven supervising officials working with the bank before it applied for emergency funding, five have now left the regulator.
The officials worked on the Northern Rock account in the 19 months before the crisis hit, with some thought to have left before the catastrophe. The Times claimed a high turnover of FSA staff may have been one of the reasons for the failings.
None of the officials were dismissed as no compensation for loss of office was paid and it is believed that one leader of the Northern Rock team departed after being passed over for promotion.
The FSA had also not been subject to a full supervisory health check for 18 months when it imploded, according to the government.
Chief executive, Hector Sants, has denied that its report on the handling of Northern Rock, set for publication soon, will be a whitewash, although he has admitted that some details will be held back to protect the legal rights of employees and to respect the confidentiality of competitor banks examined for purposes of comparison.
Frank Thurlby, compliance director at GHL Group, commented: “This shows the severity of the situation. The whole Northern Rock episode has been very embarrassing for the regulator and the Bank of England so I’m not surprised there has been a change of staffing. It’s interesting, however, that nobody at a more senior level has gone.”
