Storm at ‘toothless’ regulator: Financial Mail,
Demands grow for an independent tribunal as devastating dossier FCA fought to delay is leaked
TOP City regulator the Financial Conduct Authority was in disarray last night after the leak of a damning report into the activities of a notorious business banking division of RBS.
The 350-page document, seen by The Mail on Sunday, reveals the full extent of the abuse heaped on small firms that fell into the hands of the state-backed lender’s Global Restructuring Group.
The GRG unit was meant to nurture troubled businesses back to health, but instead fleeced and exploited them. The dossier reveals shocking episodes of bullying, mockery, threats and abuse, along with random fees and charges that were piled on firms. There are few, if any, references to named individuals in the report.
Regulators have previously published a summary of the findings.
But as late as Friday, the FCA was refusing to publish the full report, saying it is ‘legally constrained’, despite demands to do so from politicians on the powerful Treasury Select Committee.
The probe by independent experts Promontary into the now infamous GRG division began in 2014 and was completed in 2016. RBS chief executive Ross McEwan earlier this year gave his consent for the report to be published in its entirety. Nicky Morgan, chair of the Treasury committee, ordered the watchdog to publish the complete document by Friday this week, or the committee would release the documents itself.
The FCA said it could not meet that deadline because it needs to obtain the consent of individuals who gave information and to give anyone criticised an opportunity to respond, a process called Maxwellisation.
Kevin Hollinrake, Conservative MP for Thirsk and Malton and co-chairman of the All Party Parliamentary Group on Business Banking, said last night: ‘People want answers. Lives have been torn apart and in some cases lives lost.
‘It is totally wrong that the regulator seems incapable of giving answers. We are talking four years since this review started. Most victims would say Maxwellisation is not a reason for them not being forthcoming. Who is regulating who here?
‘We need a regulator with teeth but at the moment they need the permission of the people they are regulating to do their job. It is quite extraordinary.’
The summary report concluded that GRG mistreated customers but did not set out to destroy healthy firms. Andrew Bailey, head of the FCA, criticised the bank for failing to accept the criticisms ‘more readily.’
Ross McEwan, chief executive of RBS, has apologised for the mistreatment of small firms but has denied that entrepreneurs were deliberately driven out of business. Entrepreneur Derek Carlyle says he went to ‘hell and back’ after the bank’s actions led to his business going under and his home being repossessed. He said the delays in publishing the report into ‘disgraceful behaviour’ at the bank show the FCA is ‘ineffective.’ He added: ‘A fully independent tribunal system is now absolutely necessary.
‘This report is the tip of the iceberg – only a few case studies of the 16,000 SMEs affected have been mentioned. So I would hope that this will lead to further investigations and importantly, that the
People want answers. Lives have been torn apart and in some cases lives lost
senior management of the GRG department and the RBS board will be held accountable for t heir actions by the bank’s major shareholder, which is the British public.’ Outrage at fees bonanza for ex-GRG loans chief – Page 46