Reuters logo
UPDATE 1-British financial watchdog consents to scrutiny of confidential RBS report
October 17, 2017 / 1:58 PM / a month ago

UPDATE 1-British financial watchdog consents to scrutiny of confidential RBS report

(Adds quote from lawmakers, more detail and context)

By Emma Rumney

LONDON, Oct 17 (Reuters) - Britain’s Financial Conduct Authority has agreed to allow a confidential report on the Royal Bank of Scotland’s treatment of struggling companies to be scrutinised by a barrister, lawmakers said on Tuesday.

In a letter to lawmakers, Andrew Bailey, chief executive of the FCA, agreed to allow a barrister to check a summary of the report against its full contents, which the regulatory agency says was never meant to be public.

It has refused to publish the report, irritating lawmakers on Parliament’s Treasury Select Committee, who announced they had appointed barrister Andrew Green to inspect the summary last week.

The report examines the conduct of RBS’s small business restructuring unit, the Global Restructuring Group, which handled 12,000 troubled companies between 2007 and 2012, a period encompassing the financial crisis. Some customers have accused it of pushing them into bankruptcy so it could pick up cheap assets.

State-backed RBS has admitted some wrongdoing over its handling of small businesses but has said there was no evidence it pushed companies into bankruptcy. The bank has, however, set aside 400 million pounds ($527 million) to reimburse fees to customers who claim they were mistreated.

The report was leaked to the BBC, which said it showed just 10 percent of the companies placed in the recovery group emerged intact and returned to the main RBS bank. The unit has since been shut down, although a similar unit is still operating.

Nicky Morgan, chair of the Treasury Select Committee, said its legal advisers will now start their work and report to the committee before Bailey appears before them in person at the end of October.

“If the advisers’ report does not provide the committee with the assurance it needs, it will decide whether any further steps are required,” she said in a statement, adding the committee’s review should not delay the FCA from publishing its summary as soon as possible.

The FCA said last week that it has already asked an independent external counsel to confirm its summary is a fair and balanced account of the full report’s findings.

The full report is based on a so-called skilled persons report conducted by Promontory consultancy in 2014. The FCA has said such reports were compiled on the understanding they wouldn’t be published.

But Morgan has said the GRG report is an “exceptional case”, since it has already been leaked. She will quiz Bailey in public when he appears before her committee in the coming weeks. ($1 = 0.7587 pounds) (Reporting by Emma Rumney, editing by Anjuli Davies, Larry King)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below