Watchdog ‘lost control’ of RBS

THE City watchdog has been accused by MPs of “completely losing control” of a report into Royal Bank of Scotland’s treatment of small businesses.

MPs are set to use special powers to publish the highly sensitive document into the bank’s global restructuring unit after it was leaked online.

The Treasury select committee had given the Financial Conduct Authority until Friday to either publish the report in full or share it with MPs.

The FCA had warned it was “highly unlikely” it would be able to meet that deadline because it would need to get the consent of all those who had provided information and give anyone criticised “a fair opportunity to respond”.

An independent review of small businesses referred to the Global Restructuring Group between 2008 and 2013 identified “widespread inappropriate treatment”. GRG was meant to help restore the fortunes of struggling companies after the financial crisis, but has been accused of extracting income from them.

RBS has acknowledged it “could have done better” for SME customers, while insisting its culture had “fundamentally changed” since the period under review.

Nicky Morgan, pictured, who chairs the Treasury select committee, confirmed it was using parliamentary powers to require the FCA to provide members with the report. She said: “The FCA has completely lost control of the publication process. If the FCA doesn’t publish or provide the report by Friday, it will have breached an order of the House of Commons and may be found in contempt of Parliament. The committee will meet when Parliament returns on February 20. At that meeting, I will be asking members to agree to publish the final, unredacted report under parliamentary privilege as soon as possible.”

Federation of Small Businesses chairman, Mike Cherry, said: “Victims have been left waiting far too long to see its findings. Hundreds of small business owners who had their lives destroyed by GRG are still waiting on compensation. This report could help secure the redress they’re due. The truth is the very least they deserve.

“GRG management should have tackled the “systematic” unfair treatment of small firms that the report identifies. This total failure of corporate governance shouldn’t have been possible.

“We now need to create a climate where similar failings can’t happen again.”