Financial Services Authority wont publish RBS review’s content but claims RBS collapse was down to bad decisions only. THE SPECTACULAR COLLAPSE of the Royal Bank of Scotland under the leadership of Sir Fred Goodwin, dubbed by the media as the ‘World’s Worst Banker’ was simply down to bad business decisions, rather than corruption or any lack of integrity, so says the UK’s financial regulator, the Financial Services Authority (FSA) in a timely release today while most of the county’s focus remains on winter storms, Russia winning the competition to host the 2018 World Cup (удача!), and yet more expected headlines from Wikileaks on international & domestic political double dealing.
After completing an investigation which began in May 2009, the Financial Services Authority released a statement today after completing its supervisory investigation which began in May 2009. The FSA said RBS had made “a series of bad decisions” and the bank’s failure which led to the massive multi billion pound UK taxpayer bailout, seeing the RBS 84% owned by the Government, was “not the result of any lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by senior individuals or a failure of governance on part of the board“.
Sir Fred Goodwin, off the hook, still working and still has a title, unlike many now being made redundant because of the UK banking collapse.The FSA said it would be taking no enforcement action as a result of the investigation, either against the firm or against individuals, so all those who were instrumental in the downfall of the UK’s largest financial institution, and are responsible for the biggest public service cuts ever in this country, along with throwing millions of people’s lives into financial turmoil, get away with it once again. Is this justice ? I think not. However it is consistent with regulation in the UK, that is, in the world of non-existent regulation.
The FSA’s statement in full :
In May 2009 the Financial Services Authority (FSA) launched a supervisory investigation into Royal Bank of Scotland Group (RBS), as one of the UK banks that required partial taxpayer bailout support. This work considered if regulatory rules had been broken and what, if any, action was appropriate. The review was necessarily extensive and looked specifically at the conduct of senior individuals at the bank, the acquisition of ABN AMRO in 2007 and the 2008 capital raisings. The FSA conducted the review with assistance from PWC.
The FSA has now completed this supervisory investigation. The review confirmed that RBS made a series of bad decisions in the years immediately before the financial crisis, most significantly the acquisition of ABN AMRO and the decision to aggressively expand its investment banking business. However, the review concluded that these bad decisions were not the result of a lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the Board.
The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals. However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms.
The FSA’s supervisory investigations into other banks that ‘failed’ during the crisis are ongoing. If they lead to enforcement action being taken then it would be usual for the FSA to make these outcomes public if such actions against individuals or institutions are successful.
The FSA cannot publish the content of the RBS review as information gathered from the bank during the course of the review remains confidential under the Financial Services and Markets Act 2000 (FSMA).
Rob MacGregor for the UNITE union released a statement condemning the FSA’s decision not to prosecute the RBS executives and condemned the FSA as being unable to hold the banking sector to account.
Rob MacGregor, Unite national officer, said: “Once again the Financial Services Authority has demonstrated its weakness and inability to hold the sector to account. The report’s conclusions are an outrage. It is unacceptable to suggest that the behaviour of the management in this iconic UK bank did not ‘lack integrity’ when they brought RBS to its knees, resulting in thousands of staff losing their livelihoods.
“By failing to bring any formal charges against the RBS executives the FSA has allowed some of the biggest villains of the financial crisis to go on enjoying their millionaire lifestyles whilst taxpayers experience cuts and staff face an insecure future.”
We can remind ourselves just what happened to the Royal Bank of Scotland at the hands of Sir Fred Goodwin, who still retains his knighthood and a job, unlike many victims of the public services cuts, including the UK’s armed forces and even the carrier HMS Ark Royal, now sunk twice it seems, the first time by a U-Boat of the Nazi German navy and now sunk again or scrapped as a result of the financial harm inflicted on the country by bankers who are off the hook once again.
Collapse of the Royal Bank of Scotland (Click images to watch video)
The Herald newspaper reported that during the Treasury Select Committee’s evidence sessions, “The four ex-chiefs of Royal Bank of Scotland (RBS) and HBOS admitted to having no formal banking qualifications between them in today’s dramatic grilling by MPs.
“Members of the Treasury Select Committee heard how not one of the witnesses – who presided over two of Britain’s biggest and worst hit banks – had technical banking training. The bosses – including former RBS chief executive Sir Fred Goodwin – were forced to defend themselves against tough questions over their suitability to lead the banks, which had to be bailed out with billions of pounds of taxpayers’ cash.”
“Sir Fred denied he lacked experience, saying he had a degree in law and was a qualified chartered accountant, while also having worked as chief executive of the Clydesdale Bank and Yorkshire Bank before joining RBS. Sir Tom McKillop, previously chairman of now part-nationalised RBS, said he was “certainly numerate”, although he conceded he had not studied banking specifically.”
Disgusting. These people have made fools of our country, our financial system, even our way of life. There are no words at all really to describe what they have done, and the suffering their actions are causing us – but its all ok because Sir Fred Goodwin had an LLB, and since the FSA said it was all just down to a few bad decisions, that’s fine. Right ?