In a recent post on this blog, the issue of English bank regulators and their examiners having difficulty with correctly analyzing bank data was discussed. Specifically, Andrew Haldane from the Bank of England offered up that the regulators can be overwhelmed by the data as the reason for failures.
The Wall Street Journal ran a blog entry discussing how the Financial Services Authority Unwittingly Blames Itself in RBS Fiasco.
"The U.K. Financial Services Authority unwittingly pointed the finger of blame back at itself by concluding Thursday that Royal Bank of Scotland executives didn’t break the rules in the lead-up to the bank’s near collapse.
...The business moves that contributed to RBS’ weakened state when the crisis hit were described by the FSA Thursday as 'bad decisons'
...But the regulator’s conclusion that no one within RBS was particularly to blame begs the question about its own role in the matter.
... the FSA was supposed to be making sure RBS was sound, and fulfilling its broader task of protecting the stability of the U.K.’s financial system. But just months after approving RBS’ purchase of ABN Amro and determining it had enough capital to support it, it was signing off on the prospectus for RBS’ £12 billion rights issue to help cover losses in the Dutch bank’s rapidly-deteriorating credit portfolios.
...It previously admitted that it didn’t adequately supervise Northern Rock before its 2007 failure.