UK MPs order FCA to publish RBS small business report
Morgan says regulators has 'lost control' of document
The Treasury select committee has ordered the Financial Conduct Authority (FCA) to publish its report into Royal Bank of Scotland's treatment of small businesses during the financial crisis by Friday or face contempt of parliament.
Committee chair Nicky Morgan confirmed she was using the committee's powers to make the order, adding that if RBS did not meet the deadline it should submit the report to her group for publication. The Conservative MP added that she would be seeking approval from her committee to make the document public.
Tensions between the committee and regulator heightened after a full copy of the report was leaked overnight and published online. A copy has been seen by Web Financial Group, publisher of this website.
It details claims of behaviour by RBS’s Global Restructuring Group (GRG) that created financial distress for companies the division was actually meant to be helping.
One example in the report highlights the treatment of a family-run business that was transferred to GRG. The restructuring agreement included an "increased margin, arrangement fees, legal fees and monthly management fees, as well as a 15% equity participation agreement".
"Despite this, shortly after transfer, an internal email to the GRG relationship manager stated: 'Pls start charging weekly excess/monitoring fees - £2k per week seems reasonable. It will concentrate customers' minds/galvanise them into action!!'"
The FCA last week it refused a written request from Morgan to secure RBS's consent to publish the critical report into the bank's conduct. The regulator claims it cannot legally publish the report as it was compiled confidentially and individuals criticised in it had a legal right to reply to any allegations.
FCA chief executive Andrew Bailey had asked the committee to confirm that it is using its parliamentary powers to call for persons, papers and records to order the report, Morgan said on Tuesday.
“A version of the report is now in the public domain. The FCA has completely lost control of the publication process. If the FCA doesn’t publish or provide the report by Friday, it will have breached an order of the House of Commons and may be found in contempt of Parliament."
“The committee will meet when parliament returns on Tuesday 20th February. At that meeting, I will be asking members to agree to publish the final, unredacted report under parliamentary privilege as soon as possible.”