Regulator Takes Blame for Northern Rock

"It is clear from the thorough review carried out by the internal audit team that our supervision of Northern Rock in the period leading up to the market instability of late 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," said Hector Sants, the agency's chief executive.

The agency did not immediately release the full text of its review, but said it would be available by the end of April.

Britain's taxpayers have so far advanced subsidies of 55 billion pounds ($110 billion) to prop up Northern Rock.

The company's new executive chairman, Ron Sandler, announced last week that he plans to reduce Northern Rock's staff of 6,500 employees by a third and to reduce its home mortgage book by half.

Sandler said he hopes to phase out government support within four years.

___

On the Net: