‘Axe non-disclosure if it’s in public interest’

Non-disclosure arrangements for regulatory investigations should be overturned if there is a strong public interest argument, says Sir David Walker.

The Treasury select committee asked Walker and Bill Knight to conduct a review and prepare a summary of the FSA’s investigation into the fail-ure of the Royal Bank of Scotland after the regulator said it could not publish the details because no enforcement action was taken.

Giving evidence to the committee this week, Walker said a single-page document put out by the FSA in December 2010 on its investigation was a “mistake” and an account of the collapse of the bank needed to be made public.

He said: “In exceptional cases, where the public interest is so massive and the taxpayer bailout is the least of it, there is the damage to the wider economy too, I think that justifies an override.”

Knight was more cautious. He said: “Individuals who give evidence in circumstances when they are protected by a law of confidentiality are normally entitled to rely on that.”

Under the new regulatory structure, regulators will be able to announce that they are investigating a firm before the enforcement stage.

Walker said that, on the whole, the FSA operated well within a “massively inadequate” policy environment but that RBS’s acquisition of Dutch bank ABN Amro posed serious questions and the deal should have had a taskforce assigned to it.