The FSA was in denial about the scale of the banking crisis right up to the week of the historic multi-billion-pound bailout in October 2008, an investigation by the Telegraph has found.
Just days before the rescue, FSA officials, under chief executive Hector Sants, believed the most the banking system would require in emergency equity was £20bn and insisted their problems were to do with a lack of liquidity rather than low levels of loss-bearing capital. In fact by the time the crisis was over, the total equity raised by the banking sector came to around £100bn, writes the Telegraph. The City watchdog's failure to identify the key cause of the financial crisis was the culmination of more than a year's lax governance of banks' capital levels, and raises questions abou...
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