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FSA finds no lack of integrity at RBS

The FSA has closed its investigation into Royal Bank of Scotland, saying while the bank made “bad decisions” they were not the result of a lack of integrity.

The regulator says it did not identify instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the board.

It launched a probe into RBS in May 2009 to examine the conduct of senior individuals, its acquisition of ABN Amro in 2008 and its capital raisings in 2008.

A statement this morning says: “The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals. However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms.

“The FSA’s supervisory investigations into other banks that ‘failed’ during the crisis are ongoing. If they lead to enforcement action being taken then it would be usual for the FSA to make these outcomes public if such actions against individuals or institutions are successful.”

RBS was nationalised in October 2008 after it bought parts of ABN Amro just as the financial crisis erupted.


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There are 30 comments at the moment, we would love to hear your opinion too.

  1. RBS precipitate an enormous crisis that has cost you ane me real money out of our pockets. £billions to the public purse, untold lost jobs and goodness knows what.

    No harm done, chaps, I’m sure you’re all upstanding chaps. Move along now – nothing to see here.

    An IFA misses a tickbox on a form and the whole world and its uncle come crashing down on him or her.

    It’s not RBS that lack(ed) integrity, it’s the whole system.

  2. I was looking for my whitewash just the other day.
    Ah there it is.

  3. Yes, but what happened when they took their blinkers off?

  4. Did anyone really expect the FSA to find a problem with a bank?!

    Lets give them some more money so they can continue to bolster their balance sheets and cut the intermediary market out of the loop. Happy days.

  5. Well that’s alright then. Looks like business as usual between the banks and the regulator.

    IFA’s – don’t forget your gapfill, qualifications, capital adequacy, fee charging or you’ll be out of business. It’s clear that you pose far more of a risk to consumers than lovely banks like RBS you sniveling little advisers.

    Serious note: Something has gone severely wrong somewhere hasn’t it. Is it just me or does being regulated feel somewhat like I imagine it feels to live in a failing state?

  6. “The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals. However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms”.

    So what does that mean? “Who dun wot, when, why and how” will not be known as lack of integrity was not involved!

    A bank brought to the brink by bad decisions gets no fine, no name and shame either, not a good message that underlines that all those regulated are treated fairly.

    RBS 1 FSA nil

  7. FSA clears bank – now there’s a headline you see every day!!

  8. Well what else did you expect????? !!!!!!!

    in·teg·ri·ty [in-teg-ri-tee]


    1. adherence to moral and ethical principles; soundness of moral character; honesty.

    2. the state of being whole, entire, or undiminished: to preserve the integrity of the empire.

    3. a sound, unimpaired, or perfect condition: the integrity of a ship’s hull.

    Did I miss something?

  9. Mr Smug

    Yes we are living in a failed state.

    The elite are corrupt and don’t care if it shows.
    This is partly why the tea party in the US has taken off.

  10. IFA’s will be censured not only if they display a lack of integrity, but also if they are found to be incompetent or grossly negligent. Different rules for the banks ? It is now abundantly clear that by increasing the ever heavy burden of regulation on the IFA community, many will leave the industry. For those that remain, the cost of FSA levies will go up. Through these measures much of the competition banks currently face will be removed. This appears to be the unwritten purpose of all that is happening today.

  11. To The FSA
    Integity – ‘ the quality of being honest and morally upright’

  12. The old school network is working what a white wash !

    No chairman of the FSA should have any links with Banks or Insurance companies if this is the type of white wash we get. The FSA is out to destroy IFA and give yet more power to Banks this is proof.

    We need to campaign for real change as the customer and the general public are getting screwed every time.

  13. Interesting that the “Related Articles” section to the right of the above article refers to:

    FSA bans insurance broker for overcharging attempt
    14 Oct 2010.

    FSA bans partner at First Colonial Investments LLP for governance failings
    29 Sep 2010.

    FSA bans four firms from advising on Ucis
    16 Aug 2010.

    FSA bans three stockbrokers

    Level playing field???? If the FSA finds fault in the management decisions of RBS they open their own management up to further questions over their competance. They wouldn’t want that would they?!

  14. Ref Mr Smug – Absolutley right. I run a very small company and recently we have been less than £500 short on our capital requirements and have basically be forced to go AR.
    I used to love my job and the industry I am now so cynical I see how the banks really treat customers and it’d disgusting.
    But dont start me on ‘TCF’ !

  15. What a surprise!

    Next you’ll tell me that X Factor is fixed…….

  16. No suprises, after all the FSA is full of ex-bankers

  17. IFA firm: “Yeah, I know we screwed up badly and disadvantaged a lot of customers, but we didn’t mean it. It was just a series of bad decisions”.

    FSA: “Oh, that’s alright then. No enforcement action”

    Glad we’ve got that clear, then.

  18. “The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals. However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms.

    What about their competence to work within an FSA firm (i.e. RBS) now? Is it me or does the regulator lack the will, inclination or guts to take on the banks head on.

    When will it dawn on those at Canary Wharf that the public are best served by the IFA community and not the bancassurers. Do they not look at the FOS statistics or are they an inconvenient truth?

    The world is totally mad !!

  19. This is even more fishy, given that the FSA has of late been passing all sorts of new Laws (sorry, I mean Rules, of course) making the individual directors of IFA firms personally accountable for the failures of their underlings.

    Now why ever doesn’t that rule apply when it comes to a bank?

  20. i take back everything we said about bankers. i assume the Government, MP’s will therefore be apologising to RBS for suggesting that their risks brought down the economy……hmmm, i thought not.

  21. There have been various programmes and articles in the media showing how poorly this bank (RBS) has treated customers yet the FSA cannot find anything wrong. FIFA officials have allegedly taken bribes according to Panaroma perhaps Panorama should look into the activities of FSA.

  22. Alasdair Sampson 2nd December 2010 at 1:50 pm

    As a lawyer involved in FSA investigations into IFAs – – and not usually known for being stuck for words, this article momentarily shocked me speechless.

    Why am I shocked?

    Whilst we know that the headline reason why we as an economy are where we are, and why many people are suffering as they are, is directly and indirectly attributable to the practices and decisions of a number of the banks over a period time, I am shocked that the FSA Supervision review has been so short.

    I am shocked that what would appear to us on the outside as reckless trading, at best, should be described by FSA as merely “bad decisions” whether or not there was any lack of integrity by any individual.

    I am shocked that what is generally accepted to be a principal cause of and to be representative of the trading practices that brought this state of affairs about – the sub-prime derivative market – does not even get a mention!

    I am shocked that that is the end of the matter without such a complex matter being fully investigated by FSA Enforcement and Financial Crime.

    I cannot help but compare this to the IFAs I have represented and do represent.

    If an IFA promoted investments of such obvious speculative-risk profile as sub-prime mortgage derivatives – how many counterparty risks are involved in that?? – to private clients in the same manner as the banks traded them would the IFA be considered by FSA Supervision just to have made “bad decisions”?

    I would hazard a guess – just a guess mind you – that they would be referred off to Enforcement in the blink of an eye.

    And when they land in Enforcement, would the whole thing be over in a matter of a few months? I suggest not.

    I have one IFA client whose investigation by the FSA is now in its fifth year! And, after vigorous defence argument, what is the FSA’s case reduced to? Well, it disagrees with the risk rating the IFA attributed to a class of investments – the IFA says medium and the FSA says medium/high.

    When an IFA is investigated by Enforcement do they look only at the particular product promotion? No, it’s root and branch. The IFA can then expect to be battered with accusations of all sorts of breaches and constantly threatened throughout with removal of authorisations, fines and censures.

    It is difficult not to conclude that there are rules for some, and different rules for others.

    Quite astounding.

  23. A right bunch of bankers.

  24. In just the same way as the FSA finds no lack of integrity within its own walls. But that don’t make it so, does it?

    The first casualty in any war, they say, is the truth.

  25. No, the FSA would not take any action on their friends at the banks, but I bet if an IFA were to act like RBS, they would be struck off!!!

  26. In a democracy everyone should expect to be treated equally within the law.
    The investigation into RBS by the FSA must be a demonstration of the
    Democratic Deficit Mr Hoban was talking about.

  27. Alasdair Sampson’s comments are interesting. The Companies Act 2006 requires directors to run a company profitably. Yet RBS made the biggest loss in UK history of £24billion. Any sign of a BERR (the old DTI) investigation. What about the lack of due diligence of ABN Amro ? Shareholders should be calling for directors to be personally responsible. What about the pension increase awarded to Fred (the shred) Goodwin on the eve of the collapse of RBS? Is this not a fraud on the creditors of RBS who clearly knew it was going under What about the role of the auditors whose responsibility it is to report on the health of a company to shareholders and creditors?.There have been no prosecutions for any malfeasance simply because there are too many implicated .THe banking saga is by no means over.As the slow pace of the recovery threatens to expose even further writedowns over the next couple of years the UK could easily join Greece and Ireland and the rest of the PIIGS needing IMF help.The shares and corporate bonds of the whole sector are a must to avoid.We will forever regret Gordon Brown saving the ‘world’ It seems Angela Merkel is our best hope for commonsense in the future


  29. You cannot blame them it would be like looking for Hay in a Haystack.

    We can see how they justify the FSA’s large salaries now, nothing gets past these boys and girls. Back to beating up a little mortgage broker, lets get a one where there is some good skiing…

  30. FSA – Financial Watchdog! Dont make me laugh. Lapdog more like!

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