So... at long last the report on the failings of the FSA in the regulation of banks (specifically RBS) is due to be published tomorrow. Might not be entirely the whitewash that might have been expected. Old habits die hard, however, and details are leaking out pre-publication: http://www.bbc.co.uk/news/business-16126399
...The report says that the FSA did not understand the wider banking system before the crisis, it states: "By 2007 the entire UK banking system was dependent on wholesale funding and therefore liquidity had become a huge issue and that the FSA failed to appreciate this."...
...The report will say that in many respects its own staff lacked the skills to monitor banks as large and complex as RBS: "The FSA failed to foster the skills necessary to monitor the capital adequacy of the banks."
BBC business correspondent Joe Lynam has learned the report will say that internal checks and balances within RBS were flawed and that the FSA did nothing to prevent the deal, which almost ruined Britain's financial sector.
The report, carried out by the FSA and two City veterans, Sir David Walker who held senior positions at Lloyds TSB and Morgan Stanley, and leading lawyer Bill Knight, will say that the regulator carried out little fundamental analysis of the banks it was supervising before the financial crisis in 2007, and that many aspects of its work were either inadequate or deficient.
Seems to chime with the experience of insiders here.
