Just over three months ago – at 9.29 on the morning of Thursday, December 2 –a relatively innocuous-looking announcement was published by the FinancialServices Authority. The note informed those that read it that the UK’s mainbanking regulator had closed its investigation into the collapse of theRoyal Bank of Scotland.
It was 304 words long. The FSA said that it had found no regulatory fault inthe actions of the RBS board or its senior managers and that the bank’s nearcollapse, an event only prevented by £45bn in direct taxpayer support andseveral hundred billions of pounds of state-backed loan facilities, wassimply the result of “bad decisions”.
Such a short announcement on one of the biggest corporate collapses in globalfinancial history might have been hard enough for the country to stomach,but there was one additional sting left in the tail – none of the reportwould be made public. Indeed, the FSA’s chairman, Lord Adair Turner,declared there was in fact no actual report after nearly 19 months work at a cost of £7.7m.
Sunday Telegraph
£45Bn of taxpayers money went into saving RBS plus hundreds of billions of statebacked loans, and the FSA as the regulator of choice of Gordon Brown decided there was going to be no report ?
I have seen small and medium sized business directors hauled over the coals and barred from being directors for losing £100 000 ! I have seen travesties like John Gunn and British & Commonwealth being dragged through the Courts. None of these compare to the reckless behaviour of the directors of RBS. They still collect their pensions and enjoy the honours heaped upon them by the State.
Cameron should stop trying to justify bailing out Heath style corprations that are deemed too big to fail. The regulatory system is a two tier one. Friends of the State get bailouts, all the others go to the wall.
There was no justification in not immediately placing RBS in administration and breaking it up, at nil cost to the public purse. The investigation by the Telegraph is breathtaking, in that the lunatics were definately running the asylum at RBS.
The last such financial catastrophe by a Scottish bank cost Scotland its country, very much like Ireland is now owned by the EU.
The part played by the Treasury under Brown and Balls is also a key factor, like most people who are control freaks, they concentrate on tiny details and miss the big picture.
The FSA held the line for a week saying there would be no report, then at the 'first whiff of grapeshot' they caved in and a report will be produced eventually.
Meanwhile HSBC, the bank that was the first to admit there were problems with sub prime mortgages, and did not run to the taxpayer, is considering upping sticks and relocating its HQ back to Hong Kong, because of over regulation and high taxation. HSBC is a business run for the benefit of its shareholders, not as a milch cow for the Treasury.
Cameron and Cable should stop pretending they have any interest in a enterprise culture, because coming upto their first anniversary in power, the state is still growing and productive industry shrinking or moving abroad.
2 comments:
Agreed, only it's not actually even necessary to put such a bank in administration and break it up, you fix them by something even less radical than that called a 'debt for equity swap' which also costs the taxpayer nothing.
The junk assets should have been liquidated, e.g. in a manner as Mark suggests.
Question: Was RBS and HBoS kept up because they were a) Scottish and/or b) that the Govt had shifted some if not most of their accounts from the BoE to RBS?
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