BBA: Global economy at fault, not FSA

The collapse of Northern Rock was a product of the credit crunch rather than poor regulation, the British Bankers' Association (BBA) believes.

A statement in response to the Financial Services Authority's (FSA) internal report on its "failings" over supervision of Northern Rock says the industry will work with its watchdog to bring about the changes needed.

But it says "the primary responsibility for any company rests with its management".

"No amount of regulation can ensure that wrong decisions are never made. The Northern Rock is one of a number of casualties around the world of the 'credit crunch'," the BBA insists.

Rather than criticising the FSA's role the BBA says it will back the watchdog's efforts to improve its role.

"It is important for the UK banking industry that the FSA continues with its proportionate regulatory framework, using the principles based approach and with the right individuals in place," the statement added.