According to the regulator, it has been closely monitoring the building society's loan book for the past four years.
The Financial Services Authority (FSA) is facing criticism following the breaking-up of the Dunfermline building society.
An anonymous staff member claims that the City watchdog had shown complacency over regulating building societies, the BBC reports.
Under the terms of the Dunfermline's deal, the Treasury took over around £1.5 billion of the firm's loan book while some of its lower-risk loans and its savings accounts were taken over by rival building society Nationwide. It was suggested that the risky loans were putting the Dunfermline at risk of going bust - necessitating the government intervention.
The staff member had suggested that the regulator had not done enough in the run-up to the takeover. However, the FSA has hit back, writing a letter to the chancellor of the exchequer that the situation had been under consideration at the regulator since 2005.
In the letter, the regulator's chairman Lord Turner said that aspects of the commercial loan book had caused concern - and said that the regulatory blueprint he had suggested in his recent review were relevant to the Dunfermline takeover.
"I suggest that the causes of the Dunfermline failure highlight the need for the major reforms to the capital adequacy rules and macro-prudential analysis set out in the Turner Review," he was quoted by the broadcaster as saying.
Lord Turner added that concern about the building society had mounted in late 2008 - when the FSA believed that the Dunfermline needed an extra £20 million to meet possible future losses on the commercial loans. This figure grew to over £60 million when the FSA performed another investigation the following March.
The regulator then tried to put together a private takeover deal involving three other building societies - and it was when this failed that the joint government/Nationwide deal was put into action.
