McFall: Big changes needed at FSA

A "fundamental change" in the Financial Services Authority's (FSA) management is required, the chairman of the Commons' Treasury committee believes.

John McFall says today's internal report from the FSA on its monitoring of Northern Rock before the bank's collapse last autumn is "almost a dereliction of duty" by the watchdog.

"There is a big agenda to ensure that there is change in the FSA and indeed change in the financial services industry," he told the Today programme.

Mr McFall added he believed staff retention was a major problem at the watchdog, with high salaries at city banks tempting workers there away with salaries up to six times higher.

"We have to look at that and say, 'Well look, if we’re going to have a confident, lightly-regulated – not soft-touch regulation – in the United Kingdom, then we need the financial services industry to play their part to ensure their confidence in the market'."