Mortgage provider was failed by FSA
Until last year Northern Rock enjoyed a reputation as the nation’s fifth largest mortgage lender, and had enjoyed great success and an impressive reputation. However, in the summer of last year everything fell apart for the mortgage lender when it became a high profile victim of the global credit crunch. It became public knowledge that the bank had asked the Bank of England for an emergency loan, and once this had happened share prices plummeted, billion of pounds were withdrawn by savers in a few days, and the bank’s reputation went down the drain.
Since then the mortgage lender has been in talks with regards to a private sale, but this proved unsuccessful so the bank was recently nationalised. The government has been slated by many people, including the shadow chancellor, who has stated that not enough was done to help the Rock and the wrong approach was taken by government officials and authorities.
Officials from the Financial Services Authority have now admitted that the regulator failed Northern Rock by failing to identify the problems and failing to supervise the bank property. The FSA highlighted a number of areas where it believed it had failed, mainly to do with lack of senior supervision and lack of resources to enable effective monitoring of the bank, resulting in the mortgage provider becoming the victim of the first run on a British bank in nearly a century and a half.
The FSA stated that it has now put together a programme to try and improve procedures for larger banks in the future. One official from the FSA said: ‘This programme is the response of the management of the FSA to the weaknesses identified in the particular case of the supervision of Northern Rock. It is clear from the thorough reviews carried out by the internal audit team that our supervision of Northern Rock in the period leading up to the market instability of last summer was not carried out to a standard that is acceptable, although whether that would have affected the outcome in this case is impossible to judge.’
Recent additions:
- Avoid knocking the value of your home down further
- 25 year fixed rate mortgages – the experts’ thoughts
- Will additional cash help to ease mortgage markets?
- Regions of England and Wales see property prices slump
Related Posts
Northern Rock uses taxpayer’s money to revive mortgage lending
The nationalised bank, Northern Rock, is apparently using taxpayers’ money to revive its mortgage lending operations, according to recent reports. »
The Rock sells repossessed homes at knock down prices
Nationalised lender Northern Rock, which was nationalised earlier this year after becoming one of the first major victims of the global credit crunch in the UK, has been accused of selling off repossessed home at knock down prices in a bid to try and get back as much money as possible as quickly as possible rather than trying to get the best price for the former homeowner.»
Northern Rock tries to tempt more customers
Nationalised mortgage lender Northern Rock is said to be on an aggressive drive to try and increase its customer base by cutting the rates on some of its mortgage products a number of times within a short period of time. »
Nationalised bank makes obscene profits from customers
Earlier this month the nationalised bank, Northern Rock, was accused of making ‘obscene’ profits from its mortgage customers. »
90 percent mortgages make a comeback with the Rock
Previously troubled and now nationalised bank Northern Rock has announced in the past few weeks that it is making a multi-billion pound return to the mortgage market, and will be offering mortgage loans of 90 percent of the property value to eligible consumers. »
[...] Mortgage provider was failed by FSA [...]