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| Version 0 | Version 1 |
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| FSA paints grim picture for 2008 | FSA paints grim picture for 2008 |
| (about 2 hours later) | |
| High levels of borrowing could land "a significant minority" of people in trouble in 2008, the Financial Services Authority (FSA) has warned. | |
| Its Financial Risk Outlook also said that adverse market conditions were putting the business models of some financial institutions under strain. | Its Financial Risk Outlook also said that adverse market conditions were putting the business models of some financial institutions under strain. |
| The FSA expects that tighter economic conditions will increase the amount of financial crime being uncovered. | The FSA expects that tighter economic conditions will increase the amount of financial crime being uncovered. |
| It is also worried that people may lose confidence in financial regulators. | It is also worried that people may lose confidence in financial regulators. |
| "Market participants and consumers may lose confidence in financial institutions and in the authorities' ability to safeguard the financial system," its report said. | "Market participants and consumers may lose confidence in financial institutions and in the authorities' ability to safeguard the financial system," its report said. |
| 'Failed abysmally' | 'Failed abysmally' |
| The FSA itself was criticised by a committee of MPs for failing to spot the "reckless" nature of Northern Rock's business plan before the bank ran into trouble and had to seek financial support from the government. | The FSA itself was criticised by a committee of MPs for failing to spot the "reckless" nature of Northern Rock's business plan before the bank ran into trouble and had to seek financial support from the government. |
| The Treasury Committee report said the FSA had failed to "stress-test" Northern Rock's business model sufficiently and that financial stability safeguards had "failed abysmally". | The Treasury Committee report said the FSA had failed to "stress-test" Northern Rock's business model sufficiently and that financial stability safeguards had "failed abysmally". |
| News of Northern Rock seeking emergency funding led to a run on the bank as customers queued to withdraw their savings. | News of Northern Rock seeking emergency funding led to a run on the bank as customers queued to withdraw their savings. |
| The FSA stressed that its latest report was supposed to identify risks rather than predict events. | The FSA stressed that its latest report was supposed to identify risks rather than predict events. |
| "These are not firm predictions about what we think will actually happen, but are a prudent attempt to highlight the risks that could impact consumers and firms in a less benign economy," said Callum McCarthy, chairman of the FSA. | "These are not firm predictions about what we think will actually happen, but are a prudent attempt to highlight the risks that could impact consumers and firms in a less benign economy," said Callum McCarthy, chairman of the FSA. |
| "Firms and consumers need to recognise there are both short- and long-term risks and should think about the implications." | "Firms and consumers need to recognise there are both short- and long-term risks and should think about the implications." |