An FSA report on RBS: a probe or a joke?
The UK Financial Services Authority is working on a report into the collapse of the Royal Bank of Scotland. The report was due in March but the FSA is having some problems in coughing it up. Now it’s calling in Sir David Walker, a retired chairman of Morgan Stanley who recently wrote a Government report into failure in governance in the banking sector leading up the crisis.
It drew quite some criticism when the FSA announced in December that it had closed its probe into RBS and no one would be charged. Just keep in mind that the RBS was one of the most willing UK banks to lend to Icelandic business men such as Jon Asgeir Johannesson of Baugur fame and his Scottish business partner Sir Tom Hunter. Both of them ran into severe problems when there were no banks to keep their mills running. And like ia Kaupthing RBS grew at an insane rate from a small bank into one of the world’s largest. Since banks ideally should serve clients, not make them, the growth rate is indicative of a certain type of banking mechanism laid bare with the collapse of the Icelandic banks and the SIC report into the Icelandic banks.
According to the FT today:
“Lawyers for RBS are concerned that the draft as written could expose the bank to further litigation. The legal team representing Johnny Cameron, the former head of RBS’s investment banking arm, has also raised objections.”
If this wasn’t coming from the FT I would take it as a joke.
Who is writing the report, the FSA or RBS lawyers? Isn’t the FSA doing an independent probe into a bank where the state now owns 83%?
First the FSA completely and utterly fails to regulate the banks, to ask critical questions – and no change in management. Now, the FSA seems to be doing a similar job in probing the failures. To write a report that secures that no managers of RBS will be prosecuted won’t make anyone happy… except these same managers.
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