Tomlinson criticises FCA
Watchdog rejects call to publish full RBS report
RBS: faced allegations of behaviour towards small firms (photo by Terry Murden)
A City watchdog has refused to publish a report into allegations that Royal Bank of Scotland forced small companies out of business to pick up their assets on the cheap.
Instead the Financial Conduct Authority says it will release a detailed summary.
However, its rejection of calls to make the report public are likely to prompt a fierce reaction next month from Westminster’s Treasury Select Committee (TSC) which wants it to be made public.
The FCA commissioned consultants Promontory in January 2014 to look into the claims made against RBS’s Global Restructuring Group (GRG).
In a letter published today by the TSC, FCA chief executive Andrew Bailey says it is not in the public interest to publish in full because it was conducted on the basis it would be kept private.
Mr Bailey said the FCA would publish a detailed summary which is largely ready for publication once the FCA has decided whether it should formally investigate RBS or individuals.
He said: “I believe that we are near to reaching a conclusion on whether a formal investigation is called for.”
The FCA published a “high-level” summary last year, and permission from RBS and Promontory would be needed before publishing the detailed summary.
TSC Chair Nicky Morgan said there was confusion over what really happened to GRG customers.
The committee recognised that such reports were normally not intended for publication, but given it was now in the hands of several third parties, publication was overwhelmingly in the public interest, she said.
“Following my letter to Mr Bailey earlier this month, Committee colleagues and I have been overwhelmed by messages from those who consider that their businesses and livelihoods were destroyed by RBS’ GRG. Those affected have a right to know what really happened,” Ms Morgan added.
“The Committee is due to see the FCA next month, and I have no doubt that these issues will be raised.”
Reuters reported that an all-party parliamentary group on fair business banking and finance described the FCA’s refusal a “outrageous”, saying it “smacks of a cover up” and called on the watchdog to reconsider its position.
Lawrence Tomlinson, the author of the Tomlinson Report, issued a statement criticising the FCA.
“How can the Financial Conduct Authority justify that publishing the full report into the mistreatment of thousands of UK businesses by RBS’ Global Restructuring Group is not in the public interest? ” he said.
“I am shocked by Andrew Bailey’s suggestion that the investigation was conducted “on the basis that there is no intention to publish”. Any suggestion that the report may not be published has only arisen since it became clear that the conclusions of the investigation were heavily critical of RBS. Until then, the FCA’s statements had suggested that it would be published. I wonder whether we would be awaiting publication if the report cleared RBS’ name?
“The FCA should be bringing the individuals involved to justice. Banks do not make decisions, individuals working in the bank do. Many of the individuals responsible for the GRG scandal will still be working in the sector and may even be senior managers of banks.
“What is going to stop another GRG style scandal from happening again if these people get off scot free for this devastating misconduct? Another fine for the bank will not do so, as all that does is punish shareholders for the actions of officers in the bank. After all, RBS is 70% owned by the Government so as tax payers we would be paying the lion-share of those fines.
“The FCA needs to stop this from continuing to happen and prevent future such occurrences. That means identifying the individuals responsible, ensuring they are fully investigated and, at the very least, stopping them from ever being able to work in the sector again.”