FSA failed to heed doubts about Kaupthing

Link to article at Channel 4

Last Modified: 02 Feb 2009
By: Siobhan Kennedy

Channel 4 News learns that when Kaupthing bought British bank Singer and Friedlander, its chief executive told the regulators the deal should not go through.

He will share his concerns with a committee of MPs tomorrow, but his intervention has raised fresh questions about whether regulation of the banks was tough enough.

The collapse of Iceland's banks last autumn created uncertainty for millions of UK savers who had billions of pounds tied up in their British subsidiaries.

Siobhan Kennedy reports.


FSA statement

"It would be our usual practice to talk to the directors of a financial institution going through a 'change of control' i.e. when an authorised firm is acquired by another.

"In such circumstances the FSA always conducts 'change of control' checks and only approves the change if we are satisfied our requirements will be met.

"It is not our practice to discuss individual firms but, in this instance, we do not believe the statement made to the Treasury Select Committee represents an accurate summary of the events."

Interview: David Green, ex-global policy head, FSA