Pressure grows on UK watchdog to publish RBS probe
British lawmakers piled further pressure on Tuesday on the country's financial regulator to publish a probe into the state bailout of Royal Bank of Scotland, which the watchdog has said it lacks the authority to do.world Updated: Dec 14, 2010 23:41 IST
British lawmakers piled further pressure on Tuesday on the country's financial regulator to publish a probe into the state bailout of Royal Bank of Scotland, which the watchdog has said it lacks the authority to do.
The chairman of parliament's Treasury Committee urged the Financial Services Authority (FSA) to publish as much as possible of the investigation into a 2008 rescue that soaked up 20 billion pounds ($32 billion) of UK taxpayers' money.
The FSA was criticised earlier in December for clearing former RBS chief executive Fred Goodwin of wrongdoing after it closed its lengthy investigation.
In line with normal practice, it did not summarise and publish any findings because it did not begin formal enforcement proceedings.
But in a letter to FSA Chairman Adair Turner, Treasury Committee Chairman Andrew Tyrie added his voice to others already demanding that details of the FSA's report be made public.
"It is in the public interest that as much as possible of the findings of this investigation be made public," Tyrie said in his letter, which was circulated on Tuesday.
"The FSA have assured us that they have conducted a thorough investigation. We need to see it."
An FSA spokeswoman said, "We will respond to him (Tyrie) directly." She declined to comment further.
The FSA, which has already faced calls from UK business secretary Vince Cable and the Unite trade union to publish the RBS report, has said that it would need both the permission of all those investigated before publishing details of a probe, as well as an overhaul of the Financial Services and Markets Act, which forbids it from naming those investigated.
Its Chief Executive Hector Sants told on Monday that while he understood the demands, the regulator was hamstrung.
"I am extremely sympathetic to those people who have argued the FSA should produce such a report and I can absolutely understand the value such a report would have," Sants said.
"However, a supervisory investigation which is designed to determine whether or not there should be an enforcement referral is not the best vehicle for such a report.
"That's because under our powers, which are determined both by UK parliament and European directives, we are not allowed to publish information which we collected throughout our supervisory investigations without the permission of both the individuals and the firms from who we collected it."
On Dec. 2, the FSA said that it had cleared former RBS chief executive Goodwin of wrongdoing as it closed its investigation into the problems at the bank.
Goodwin presided over an aggressive acquisition strategy at RBS, culminating in the costly takeover of Dutch peer ABN AMRO, and his policy of generating savings by cutting jobs earned him the nickname 'Fred The Shred.'
However, the credit crisis of 2008 left his plans in tatters due to RBS's exposure to the US property market slump, toxic assets and a decline in fortunes at ABN AMRO. ($1=.6301 Pound)