Mr Sants has pointed out the obvious to the BBC in the following article http://www.bbc.co.uk/news/business-18419434. Of course there were many other ways Northern Rock’s fall could have been averted or mitigated. The most obvious was for the regulator to demand the Bank bought insurance when it lent long and borrowed short for the risk it could not borrow again. As someone who has studied internal audit and risk analysis I would have expected the FSA to have identified this potential risk and put measures in place to mitigate it, like demanding some insurance, and making sure that all the mortgages that were being offered had enough equity to be attractive for investors if there was a correcting in house prices. I hope such lessons are learnt and will prevent such occurrences in the future.rnrnThis information is intended to provide a general review of certain topics and its purpose is to inform but not to recommend or support any specific investment or course of action. The tips may not apply, or be suitable, to everyone and you should contact us for advice if you are unsure whether this is the case.rn
