and it dragged pretty much everyone else down when it fell.

Of course, we had the spectacular collapse of Northern Rock which was driven to some extent by the exuberance of lending fuelled by the relaxed approach to risk. However the UK was, and remains overall, a far more prudential nation in matters of lending and funding than the media would have you believe.

asLeep on The job

Accordingly, I consider the failure of Northern Rock and the financial services meltdown that followed to be predominantly caused by the closure of the wholesale credit markets in August 2007 which resulted directly from the US collapse. And, yes, despite Ms Blackwell’s comments to the contrary, the FSA did very much fail to spot the weaknesses in Northern Rock’s funding

strategies and the inextricable link to high-risk lending, incorporating the infamous 125% loans.

I have for a while believed that the

FSA’s expressions of wanting to work in conjunction with the market were not entirely sincere. Ms Blackwell’s diatribe finally confirmed my suspicion that much of the ‘consultation’ is not genuinely supported by real conviction; in other words we unfortunately appear to receive little more than brazen lip service at present.

Indeed, as I listened with dismay to Ms Blackwell’s presentation it now appears more obvious then ever that the FSA ‘plan’ is a misguided attempt to create the ‘perfect’ financial services market; with perfection being accomplished by the virtual eradication of risk. This is of course quite bizarre and yet also very worrying as the market and borrowers needs are surely far

too complex and variant to fall under a single one size fits all approach?

rIsk TakIng

In short, whilst the FSA have a duty to protect consumers they should not have the right to prevent them from taking risks – but such risks should be adequately highlighted to them. The rest must be down to the consumer and their advisers.

So as we move from what is meant to be laudable, and yet could become ominously laughable, might I suggest the very real and pressing question is ‘who is actually regulating the regulator?’ Can an agency which regulates truly

be more expert then the markets it polices? I would say not.

Which begs the final question of what might be the eventual outcome if the continuing ‘self assured enthusiasm’ of the FSA is not curbed? n

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