Tuesday, 31 July 2018

Financial Conduct Authority defends decision not to act over RBS small firms scandal

The Financial Conduct Authority has defended its decision not to take punitive action against the Royal Bank of Scotland over the bank's treatment of small businesses by its global restructuring group.
GRG, the bank's now-defunct turnaround unit, was accused of pushing small firms towards failure, in the hope of picking up their assets on the cheap after the companies had gone to the wall.
Some firms said they were pushed into bankruptcy after they were transferred into the controversial division between 2008 and 2013.

RBS has since offered a total of £125m to victims of GRG.

The FCA said it had concluded that its powers to discipline anyone for misconduct "do not apply" to the GRG investigation.

The watchdog added that action against senior management in the global restructuring group for lack of fitness and propriety "would not have reasonable prospects of success".

The FCA said it had taken independent, legal advice on its decisions, which found that GRG's activities were not within its remit and confirmed "the FCA's conclusions are correct and reasonable".

But the Treasury select committee said the FCA's decision was "disappointing and bewildering" for those affected by the scandal and called for greater regulation of SME lending.

Nicky Morgan, chair of the committee, said: "This demonstrates the need for a change in how lending for SMEs is regulated.
"The government should stand ready to introduce any legislation required when it sees the outcome of current reports on redress and should also urgently consider what additional powers the FCA requires to act in cases such as GRG."

SKY       News.

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