RBS collapse: No ‘blow-by-blow’ account

The chairman of the Financial Services Authority (FSA), Lord Adair Turner, said in a letter to the Treasury Select Committee that he would seek permission from RBS to publish the key findings of the inquiry.

The announcement, which followed two days of pressure on the FSA to publish the report, came as it was announced that Lord Turner had been called into Whitehall for a meeting with the Business Secretary, Vince Cable.

Interviewed on Channel 4 News, Mr Cable said he hoped the FSA would publish as full a version as possible, dealing not just with the failures of the bank, but of the FSA itself.

“It is rather Alice in Wonderland,” he admitted. “Unfortunately the legal powers which the FSA have are limited. They have entered into confidentiality agreements in one or two cases. They have to get over them to publish.

“It is rather Alice in Wonderland…It is a very highly unsatisfactory position.” Business Secretary Vince Cable

“It is a very highly unsatisfactory position. We have really got to make sure in future that this doesn’t happen again and that they have the powers to publish.”

Mr Cable said he understood that the report concluded there had been “terrible mijudgements”.

“I don’t think anybody is alleging criminal activity, but we haven’t seen it.”

He said that a further report on the collapse of HBOS might have “more far-reaching recommendations”, but he did not want to “jump to conclusions”.

Lord Turner admitted it was “extemely unsatisfactory” not to be able to publish a public account of last month’s report, which concluded that no action would be taken against RBS bosses – including the former chief executive Sir Fred Goodwin – after it had found no evidence of fraud or dishonest activity.

“We do not envisage a detailed blow-by-blow account, but a clear description of any key failings.” FSA chairman Lord Turner

Replying to a letter from the Treasury Committee chairman – the Conservative MP Andrew Tyrie – Lord Turner said the FSA was seeking permission from RBS and “a number of third parties” to publish some details.

“We do not believe it appropriate to publish these in full, but now propose that we ask RBS whether it is willing to give its permission for the FSA to use the information gathered as a key input to the development of a report,” he wrote.

“We do not envisage a detailed blow-by-blow account, but a clear description of any key failings, whether related to FSA supervisory processes or to the decisions made by the board and executives of the bank.”

RBS is 83 per cent owned by the taxpayer after the Government was forced to order a bailout following the bank’s collapse, triggered by a series of events, including the takeover of ABN Amro on the eve of the credit crunch.

An RBS spokesman said: “RBS has no objection to a public discussion of the key issues which led to its need for recapitalisation during the financial crisis or to a report by the FSA on that topic. Indeed the new management and board have addressed the subject openly over the last two years.

“When the FSA has determined the confidential material it wishes to release publicly, the Bank will engage constructively to facilitate publication of the report, subject to any necessary commercial constraints.”