Action called over FCA

MP demands inquiry into regulator’s bank probe failure

RBS Gogarburn

The FCA said it did not have power to punish RBS  (pic: Terry Murden)

An MP on an influential parliamentary committee is calling for a public inquiry into the regulatory regime’s handling of banking scandals.

Kevin Hollinrake, co-chairman of the All Party Parliamentary Group (APPG) for Fair Business Banking has criticised the Financial Conduct Authority (FCA) for not taking further action against Royal Bank of Scotland Group after an investigation into the bank’s treatment of business customers.

In a letter to the FCA chief executive Andrew Bailey, Mr Hollinrake said: “The APPG is naturally disappointed and extremely concerned by the announcement that no further action will be taken by the FCA with regard to the investigation into RBS’ treatment of business customers.”

Hollinrake said the current regulatory framework was ill-equipped to deal with “scandals” seen over the past years, and called for a public inquiry over banking scandals.

The FCA said last month that it had no powers to take enforcement action against RBS or those who worked in the bank’s Global Restructuring Group (GRG) unit which was accused by small firms of stripping their assets between 2008 and 2013.

Calls have already been made for the FCA to get new powers.

Mr Hollinrake adds in his letter: “Bearing in mind that the FCA states that it has such limited powers with regard to enforcement, we have deep concerns regarding other investigations currently underway, in particular Lloyds and HBOS Reading.”

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