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Walker and Knight to review FSA’s RBS report

The Treasury select committee has announced Sir David Walker and Bill Knight are to review the FSA’s report into the collapse of Royal Bank of Scotland.

The report was originally expected in March but has been delayed due to legal wrangling between the bank’s lawyers and the regulator over the tone and the content of the report.

The FSA says Walker and Knight’s review will ensure the report is seen as a rigorous and transparent account of what led to RBS’ failure.

In December, Treasury select committee chair Andrew Tyrie (pictured) called for the report to be released and made the announcement this morning saying it is essential Parliament can see it.

Tyrie says: “We need to know the decisive mistakes which destroyed RBS, how they came to be made, whether the FSA was asleep at the wheel, and whether we can have confidence they are awake now.”

The regulator agreed with the appointments.

Walker, who was tipped ahead of the announcement, was previously Morgan Stanley International chairman and was responsible for the Walker Review into corporate governance failure in banks at the time of the crisis.

Knight is a solicitor and the chairman of the Financial Reporting Review Panel.

Earlier this week, Business Secretary and Liberal Democrat MP Vince Cable attacked RBS, which is 84 per cent owned by the tax payer, for setting up “obstacles” to block the report’s release.

FSA chairman Lord Turner, who agreed to Tyrie’s request for the report’s release, says there is a strong public interest in publishing the report but that doing so takes time.

He says: “Producing a high quality account takes time, both because the causes of RBS’ failure are complex and because of the need to respect due legal process and confidentiality constraints.”

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  1. Julian Stevens 9th May 2011 at 11:25 pm

    One is tempted to speculate that the aspects of the report with which RBS’s lawyers are unhappy are that it attempts to absolve the FSA of any responsibility and dump it all instead on the directors of RBS. From Andrew Tyrie’s comments, it’s hard not to infer that this is very much what he suspects, whilst Adair Turner has already admitted publicly that the reason the FSA failed to regulate the banks was because it was instructed by the Treasury to look the other way and just let them get on with it. What a disaster that policy that’s turned out to be.

    Will Walker and Knight’s review really be “a rigorous and transparent account of what led to RBS’ failure” (typical FSA-speak) or will it end up being watered down so as to avert yet another massive regulatory failure being exposed for everyone to see?

    You could hardly make it up.

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