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There was no head for the department in charge of the supervision of Northern Rock at the FSA from May to August 2007, according to the regulator’s own internal audit.

This is just one of the catalogue of failings the FSA admitted to in its internal audit into the supervision of the bank.

Other failings included putting the bank into a supervision group that was primarily responsible for supervising insurance; reducing the 36 month supervisory period; the absence of, what is believed to be, an FSA staff member meeting with the group finance director to discuss the crucial July trading statement; and the regulator failing to spot a list of danger signals.

Danger signals the FSA missed:

Source: FSA internal audit.

Northern Rock was initially put in a retail group primarily responsible for supervising insurance groups, which resulted in it being moved to another group, and by February 2007 it was in a group that supervised banks and building societies.

The 136 page internal report admitted: "We believe that supervising a major UK retail bank within a predominantly insurance department had implications for the effectiveness of its supervision. The supervisory team suggested to us that this arose from the lack of regular dialogue within the department on business and market issues in the banking sector."

The report also highlighted significant activity within the retail groups - including Santander's takeover of Abbey; the demutualisation of Standard Life; and the bids for ABN Amro by Barclays and Royal Bank of Scotland - meant that none of the heads of department responsible for Northern Rock met the firm in the period reviewed.

The report said: "We conclude that the relatively short tenure that two of the head of departments had with Northern Rock made it difficult for them to build up a detailed understanding of the firm's strategy of the risks and issues it faced. We believe that this also impaired their ability to provide on-going and effective engagement with the supervisory manager and the team."

A number of regulatory Arrow meetings were also not written up. These included meetings with Adam Applegarth, chief executive of Northern Rock, its deputy chief executive, head of internal audit and the external auditors Pricewaterhousecoopers, and neither the bank nor the FSA have electronic or written copies. The internal audit added that this practise was "contrary to standard" practise.

The internal audit review, commissioned last year by Hector Sants, makes seven high level recommendations for firms' supervision in the future.