City chief who supervised Northern Rock received £612,000 pay-off

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The City chief directly in charge of supervising Northern Rock at the time of its collapse left the Financial Services Authority with a £612,000 pay-off, it emerged today.

Clive Briault stepped down as managing director of the FSA's retail banking division in April' by mutual consent'.

The pay-off for Mr Briault, who had been with the FSA since it was set up in 1998, emerged in the FSA's annual report published today.

It included £326,452 in salary, a £30,000 performance-related bonus, as well as £202,500 in compensation for loss of office, £36,000 in pension contributions and £17,500 in professional fees.

The details come after the FSA faced heavy fire for not foreseeing the problems at Northern Rock, whose funding dried up in the credit crunch last summer.

Northern Rock was at the centre of the first UK bank run for more than 140 years and borrowed more than £25 billion from the Bank of England before being nationalised in February.

The FSA's own damning report has already labelled the watchdog's handling of the affair as 'unacceptable' and outgoing chairman Sir Callum McCarthy said the organisation had learned 'painful lessons'.

The regulator said it had misjudged the risks involved in Northern Rock's business plan and also highlighted a lack of regular contact in the months leading up to the crisis.

The FSA has pledged to recruit around 100 extra staff to boost its supervisory teams in an attempt to guard against another Northern Rock crisis.

In January, MPs on the Treasury Select Committee accused the regulator of a 'systematic failure of duty' by failing to spot the bank's 'reckless' business plan.

But FSA chief executive Hector Sants said today: 'I am determined that the FSA will not be defined by the Northern Rock incident, but rather by our response to it.

'We have demonstrated our willingness to examine ourselves critically and to learn lessons from our mistakes - a quality we believe is central to giving the financial services industry and consumers confidence in the FSA.'