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FSA rejects claims by whistleblower

The Financial Services Authority (FSA) has this weekend rejected claims by a former employee that leaders at the authority stood by as a number of building societies expanded into more risky investment areas. The claims were passed to Liberal Democrat Treasury spokesman, Vince Cable, and published in the financial Times in their full glory. So what exactly went on?

In a worrying development, while the FSA has rejected all of the claims outright it has conceded that sufficient attention was not given to changing business models in the U.K.'s building society sector. In a counterclaim against the whistleblower's accusations, the FSA confirmed that all UK building societies are put through "stress tests" on a regular basis and that only one had failed of late - the Dunfermline Building Society, which was broken up and sold off last month.

Slowly but surely, after focusing much of their attention on the UK financial sector, the FSA and the government appeared to being left wanting with regards to their regulatory duties. As the ongoing campaign against the likes of Sir Fred Goodwin start to lose pace, many are now starting to look elsewhere as the blame game continues. Is there more to the FSA and the UK government's role in the collapse of the UK banking sector than initially thought?

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