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FSA may keep HBOS and B&B reports secret

The FSA plans to keep the outcome of its investigations into HBOS and Bradford & Bingley secret unless it finds wrongdoing, according to reports.

This morning’s Guardian says the FSA investigations into the banks is ongoing and it may never release information uncovered during the investigation.

An FSA spokesman says: “If they lead to enforcement action then it would be usual for the FSA to make these outcomes public if such actions against individual or institutions are successful.”

Last week the FSA said they found no lack of integrity by RBS senior individuals or a failure of governance on the part of the board.

The FSA used section 348 of the Financial Services and Markets Act as a reason not to release the PricewaterhouseCoopers report into events at RBS before it was bailed out to be released.

The Chancellor George Osborne is said to be looking at whether the there is a case to change the law so the report can be released and Liberal Democrat treasury spokesman Lord Oakshott is demanding the report be placed in the parliamentary library and if necessary redacted to protect the most sensitive information.

RBS former chief executive Fred Goodwin is said to be happy for the report to be made public.

Under current FSA rules information from FSA investigations is released at the point of a successful enforcement action but the regulator has come under fire from Which? recently to release data earlier.

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. There seems to be a sort of conveniently circular logic to this. The FSA says it has uncovered no “lack of integrity by RBS senior individuals or a failure of governance on the part of the board” so it isn’t going to publish. However, in light of what happened to those two institutions, it’s hard not to suspect that a third party examining the evidence might well come to a very different conclusion. But, as the FSA has declared it considers there to be no reason to publish and no other party is permitted to formulate an independent verdict on the appropriateness ot otherwise of that determination, the door remains firmly shut. Somehow, it doesn’t smell right, does it? Lack of accountability and all that.

  2. How is keeping information secret in the public interest?

    Is this the real face of self serving FSA?

    It rather looks like the absence of a professional examination structure for Members of Parliament and smacks of don’t do as we do, do as we command..

  3. Leaving aside the un-democratic nature of this whole process this quote fascinates me:

    “RBS former chief executive Fred Goodwin is said to be happy for the report to be made public.”

    I am shaking my head, literally and figuratively.

  4. Lets get this straight, the UKs largest mortgage lender and one of the worlds largest banks ( by balance sheet) are hours from going out of business, but there is no wrong doing.

    If this is correct, then every member of the FSA should resign as they are unable to control these large organisations and are putting the whole financial services industry under threat.

    something has gone seriously wrong with our system and every tax payer in this country is paying a hefty price.

    Either the banks were up to no good or they were not properly controlled, either way heads must roll.

  5. Even the Police would have difficulty keeping a similar situation private.

    What we really need is a complete independent analysis of the FSA since it was first established.

    They have one hell of a lot to answer for, but sadly no one seems to have the guts to do it.

    You start to get the feeling we are no longer in control of our destiny/democracy and that there are similarities between the FSA and a military Junta.

  6. What was the last Government (which founded the FSA) so fond of telling us? “If you’ve nothing to hide, you’ve nothing to fear”?

    So what’s this then? More a case of “do as we say, not as we do”, I think. The day the FSA welcomes true accountability for its actions is the day we find snow in Death Valley.

  7. Why? To protect the guilty who still work there?

  8. We need to discuss these very serious issues and not allow the FSA to cover up the truth, as this will only lead to future disasters.

    I believed that these issues are so great that we should have had an Open Independent Royal Review of the entire financial services sector.

    I would not allow any of the big four accountancy practices to participate in any investigations or reviews of the financial sector because they all have vested interests.

    Part of the problem within financial services is the auditing and advice given by accountancy practices, which is highlighted in the RBS case. Another example of bad auditing which led to a major collapse in a different industry is Enron.

    We also need to take into consideration the failings of the FSA and the reasons why the regulatory system failed so badly. Some of the reasons why it failed were:

    • Lack of qualified staff with the FSA
    • FSA chairperson and senior staff members having links to the Banking and Insurance world (e.g. ex-chief execs).
    • Lack of transparency within the FSA
    • Culture of secrecy, which leads to an abuse of power.
    • Treasury Select Committee lack of oversight into the performance of the FSA and Bank of England against its charter and enforcement of regulations.

    Finally, it is obvious that there is a desire on behalf the FSA to cover up both its own failings and the failings of others. We must not allow this to happen, as it is only a matter of time before we will have yet another serious situation.

    I believe that the National Audit Office should audit all major companies within the UK rather than the big four accountancy practices that clearly have vested interests in giving companies clean bills of health. It is clear that it is in the public interest for audits to be done on an adversarial basis, rather than the present system of vested interests, which does not protect investors or indeed the taxpayer, which ends up bailing out companies that have been run badly. It is a fact that many of the present day accountancy practices lead to hidden losses on balance sheets and a lack of transparency which results in problems for investors.

    Deloittes the auditors of RBS are reportedly going to be charging them £40 million for consultancy and auditing services. Would and accountancy practice that is receiving £40 million a year really put negative information out about the organisation even if it had suspicions. In my opinion, I suspect they wouldn’t as they would want to keep RBS as a client. Due to the fact of mergers and acquisitions we now find ourselves in a situation where there are few firms in the UK that have the expertise and financial backing to be able to audit large firms like this in fact there are probably only 4.

    I also believe that any chairperson of the regulator should have a restricted contract of up to 5 years to stop any potential backhanders in job offers after their tenure finishes. This may mean that the chairperson receives a large remuneration package but this is better than having a system that is clearly not fit for purpose in my opinion. I would also like to see a Chinese wall system put in place together with a register of vested interests and contacts between senior financial services staff e.g. banks and FSA staff that is open to public scrutiny like the MPs register.

  9. Where’s Julian Assange when you need him?

  10. Why not? The FSA have done a cost benefit analysis of RDR – we know it will cost £1.7b but they are keeping the benefit element secret?

  11. FSA = Facist Financial Service Regime run by ex bankers for the benefit of bankers!!!!

    Amazing it feels like 1939 not 2010

  12. Forget wrongdoing by the institutions themselves, what about the FSA’s governance, (in)competence, oversight of due diligence and whatever else they are supposed to be doing……….the FSA knows that it has failed miserably, is not fit for purpose and is actually part of the problem.

    Another demonstration of just how unaccountable and out of control this monster is !

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