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10 Mar, 2008

By Matthew Goodburn | 09:49:30 | 10 March 2008

Five of the seven Financial Services Authority (FSA) officials who worked on the Northern Rock team in the run up to the disastrous events of last August have resigned from the financial watchdog.

An FSA spokeswoman said the five had left but refused to name the individuals involved and declined to say where the remaining two people were now working within the organisation.

She said: 'Five of the seven people involved who worked on the Northern Rock team from January 2006 to July 2007 have left the FSA. None were given compensation.'

The FSA has been accused of not fully appreciating the scale of the funding and liquidity issues facing the bank due to the nature of its business model. Some commentators have suggested the high level of turnover at the FSA exacerbated the problems experienced by the bank.

Chief executive Hector Sants, who took over from John Tiner just days before the liquidity crisis hit the financial system last July, admitted recently to a House of Commons Select Committee that Northern Rock had not had a full supervisory healthcheck for 18 months at the time when its shortcomings were fully exposed last August.

Rock's chief executive Adam Appleyard and chairman Matt Ridley resigned over the debacle late last year but so far no Government or regulatory official has publically done so.

The FSA's internal auditor Rosemary Hilary is due to release a report analysing the FSA'a handling of the crisis later in the month.

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