FSA set to publish report on Northern Rock

LONDON (Reuters) - The financial watchdog will next week publish the first internal report into its handling of the crisis last year at Northern Rock, the embattled mortgage bank since brought into public ownership.

The report, presented to the Financial Services Authority's board last month, will be published on Wednesday, in the first full assessment by the regulator of its own performance, an FSA official said on Thursday.

It is not expected to criticise individual performances but will lay out possible improvements, the official said.

The near-collapse of Northern Rock in September left the FSA facing the biggest crisis since it was set up in 2000, being accused along with other regulators of being "asleep at the wheel" and of failing to do enough to prevent the first run on a UK bank in over a century.

A report by a committee of influential legislators earlier this year said the FSA had failed in its duty and argued for a new office to be set up to intervene in troubled banks.

FSA officials have defended their performance but have said they could have been more forceful in their dealings. Chief Executive Hector Sants said last month that supervision of Northern Rock was "not of sufficient intensity and rigour".

Since September, the FSA has shaken up its management, with several supervisors, including one of the top regulators in charge of the mortgage bank, set to leave. It has also beefed up its supervision of banks and created a specific role to monitor financial stability.

The FSA is already reviewing liquidity rules and has tightened its control of banks' risk management.

(Reporting by Clara Ferreira-Marques; editing by Rory Channing)