FCA declined to publish report on RBS unit’s treatment of small businesses over legal concerns
The UK financial regulator has drawn widespread criticism for holding back full report over allegations that Royal Bank of Scotland mistreated thousands of customers
The Financial Conduct Authority decided not publish its report into allegations that the Royal Bank of Scotland mistreated small businesses, after receiving legal advice that it could be sued by the state-owned lender.
While the financial regulator considered publishing its report into RBS’s Global Restructuring Group, after receiving legal counsel from an external barrister it chose to only release a summary, according to internal board minutes first reported by The Times.
RBS’s controversial Global Restructuring Group (GRG), which operated between 2005 and 2013, has been widely accused of pushing some firms – which it was meant to be supporting – into bankruptcy for its own profit.
Known as the “skilled person’s report”, the document was ordered by the FCA in 2014 and was conducted by consultancy group Promontory.
“External counsel’s advice led us to the conclusion that publication of the final report would expose the FCA to an unacceptable risk of successful legal action by current / former RBS managers for unfair treatment,” the minutes said.
“We are working on the basis that we will need the consent of RBS to publish the full report. Publishing without their consent would give rise to significant legal risk to the FCA,” the minutes added.
Although the publishing of a redacted version was considered, the FCA concluded that this would “simply fuel speculation about the content that had been removed”.
Despite coming under severe pressure from MPs and GRG’s victims, the FCA has previously said it would be impossible to publish the report in full without consulting the individuals named in it, which could take a number of months.
This process is known as Maxwellisation, whereby people criticised in official reports are allowed to respond prior to the publication.
The summary report, which was published in October, concluded that RBS had failed to support small companies and didn’t have adequate procedures in place concerning its relationship with customers.
“RBS has accepted that it did not meet the standards it set for itself, which impacted on how it treated some of its SME customers,” said FCA chief executive Andrew Bailey in a statement.
RBS has since taken voluntary steps to protect customers with a review of complex fees and a complaints scheme for small business customers, overseen by an independent monitor.
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