The UK’s financial watchdog has defended its handling of a report into Royal Bank of Scotland’s treatment of small business customers following claims it failed to publish the document over fears of being sued.
The Financial Conduct Authority (FCA) said it is “normal practice” to consider legal risks when making regulatory decisions, which includes taking advice from external counsel.
“It has been suggested that we chose not to publish the report because we were afraid of legal action being taken against us,” the watchdog said in a statement released on Friday.
“It is usual practice for material risks identified in the FCA’s Governance Committees to be reflected in Board papers and discussed at Board meetings to ensure robust oversight of FCA decision making.
“We, as a regulator, would expect the same rigour and standards of risk management from the firms that we regulate.”
Details of its decision to stop short of publishing the full report came to light as part of a Freedom of Information (FOI) request filed by The Times.
Andrew Bailey, chief executive of the Financial Conduct Authority, which has again defended a decision to issue a summary of its RBS investigation (Suzanne Plunkett/PA)
Internal board minutes showed that the FCA believed there was an “unacceptable risk of successful legal action by current/former RBS managers” if it published the full investigation, according to The Times.
Despite calls to release the entire report, the FCA has stuck to plans to just publish a summary – the final version of which was put out at the end of November – which pointed to “significant concerns” about how small business customers were treated by the bank.
RBS has been dogged by allegations that its Global Restructuring Group intentionally pushed small businesses towards failure in the hope of picking up their assets on the cheap.
The FCA said it may take further action against the state-backed lender, but has still stopped short of offering to release the entire investigation.
“Publishing the full skilled person’s report would be unlawful without getting the necessary consents from all affected parties as the FCA would be acting in breach of statutory restrictions on the disclosure of confidential information,” the FCA reiterated on Friday.
“In addition, individuals are allowed the opportunity to see and comment on criticisms which are to be made of them in a published report,” the FCA said, noting that getting consent to publish would be a “complex and lengthy” process and potentially lead to a “heavily redacted” version.
“Likewise, we had to have regard to the possible effect of publication on our ongoing focused investigation.
“We have therefore not sought consent from the individuals or groups of individuals who are identified in the Skilled Person’s Report,” it added.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here