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Vince Cable 'disgusted' with FCA over RBS mistreatment of small firms

January 19, 2018 2:59 PM
By Richard Partington in The Guardian
Originally published by South Lincolnshire Liberal Democrats

Vince CableLib Dem leader condemns regulator for failing to expose alleged role of bank's management in treatment of small businesses.

Vince Cable has attacked the City watchdog for failing to publish a full report into the mistreatment of small businesses by the Royal Bank of Scotland, as MPs lined up to condemn the bank in parliament.

The leader of the Liberal Democrats expressed "disgust" that passages of a damning report by the Financial Conduct Authority had not been released, four-and-a-half years after he first referred the case to the regulator during his time in the coalition government.

The FCA published most of its report into RBS's global restructuring group (GRG), which is alleged to have driven small firms to the wall in pursuit of profit, but left out a section about the bank's management team.

Cable used parliamentary privilege to name former RBS employee Nathan Bostock - who is now chief executive of Santander UK - as one of the bankers "responsible" for a policy that unpublished passages of the report allege management would, or should, have known would lead to the mistreatment of customers.

"If the reported passage from the full report is correct, then questions have to be raised over the management who were responsible for GRG. The FCA must also then disclose who they think is responsible," he added.

Labour MP Clive Lewis called for the public debate in parliament on Thursday over the issues at the bank, which first arose several years ago. Ahead of the debate, the Treasury committee published a memo called "Just Hit Budget!" sent to GRG staff in 2009 and released by the bank to MPs.

The memo referred to struggling companies - many of which had been damaged by the banking crisis - as "basket cases", while staff were told in a section of the memo headed "Rope" that: "Sometimes you need to let customers hang themselves."

Treasury minister John Glen said he would "stop at nothing" to help small businesses "failed" by RBS and other banks, while Nicky Morgan, the chairman of the Treasury select committee, warned information had to be "dragged out of" the bank.

Lewis said the practices at GRG were perhaps the "largest theft anywhere, ever", while MPs also heard that the unit was "more like an abattoir" where firms were taken apart.

A spokeswoman for RBS said the City watchdog confirmed that the most serious allegations against the bank had not been upheld. The FCA said it was supported in its decision not to release the passages of the report by an independent reviewer, Andrew Green QC.

A spokesman for the GRG business action group, which represents 500 firms put into financial distress by the bank, said: "[The] debate reveals the widespread and justified anger amongst politicians at the conduct of RBS's rogue bankers. It's time the government - the majority shareholder in the bank - sat up and listened."