An influential committee of MPs is ramping up pressure on Britain’s financial watchdog to publish details of misconduct at Royal Bank of Scotland and has threatened to use “formal powers” to demand publication of a leaked report.
Nicky Morgan, chair of the Treasury Select Committee, has written to Financial Conduct Authority (FCA) chief executive Andrew Bailey proposing to appoint Andrew Green QC as an independent legal adviser to compare the regulator’s impending summary with the underlying report into the scandal at RBS’s controversial restructuring unit.
The FCA has so far refused to publish the report in full, claiming that it would reveal confidential information about individuals, instead offering a detailed summary.
In the latest twist in the saga, Ms Morgan said if the FCA refuses the proposal for independent legal scrutiny of the summary, or if the legal adviser does not provide the necessary assurances, the committee may look to force the FCA to publish.
She said: “The committee wants the maximum possible transparency to be brought to this long-standing issue.
“With that in mind, it has proposed an arrangement under which it appoints an independent legal adviser to provide assurances that the FCA’s ‘summary’ closely reflects the underlying GRG (Global Restructuring Group) report.
“If the FCA declines this proposal, or if the legal adviser cannot provide the committee with the assurances it needs, the committee may use its formal powers to require the FCA to produce the report.”
The threat comes after the committee called last month for publication of the report into mis-treatment of small business customers at the RBS restructuring unit following a leak to the BBC in August.
Mr Bailey pushed back, saying that publishing the skilled persons or Section 166 review – which collects insight about a firm’s activities from third parties – would mean revealing confidential information about the individuals who contributed to it.
He said the FCA would provide a summary and has asked external lawyers to ensure it is a “fair and balanced” account of the report’s findings.
The FCA also has yet to decide whether the case requires a formal investigation.
In her latest letter to Mr Bailey, Ms Morgan said the FCA has “lost the confidence of many former GRG customers” by so far failing to disclose key details in initial summaries of the report.
She said the committee understands the need for so-called section 166 reports, which are not normally published, adding the proposal for an independent legal adviser takes that into account.
An FCA spokesman said the regulator welcomes “further dialogue” with the committee on providing assurance about the publication of the summary.
He added: “The FCA has committed to publishing a detailed summary of the GRG report.
“To provide assurance on the summary, we previously asked an independent external counsel to confirm that it is a fair and balanced account of the full report’s findings.”
The committee’s calls for publication have echoed those by the SME Alliance and lawyers suing RBS on behalf of businesses affected by the scandal – which allegedly saw RBS’ turnaround unit GRG intentionally push businesses towards failure in hopes of picking up their assets on the cheap.
The study was commissioned by the regulator almost four years ago as part of its inquiry into its GRG, and while the FCA pledged last November to publish a “full account” from the skilled persons’ report, it has so far refused to make it public.