We need regulator with teeth who is willing to bite, says MP
A YORKSHIRE MP is calling for the creation of a watchdog 'who is prepared to bite' as anger grows over the delay in publishing a report into claims that a state-backed bank mistreated some of its small business customers.
The City watchdog has said it is “highly unlikely” that a report into RBS’s GRG, the lender’s controversial restructuring arm, will be published before a deadline imposed by MPs, but it has agreed to send them a copy.
Kevin Hollinrake, the Conservative MP for Thirsk and Malton and co-chair of the All Party Parliamentary Group on Fair Business Banking, demanded the Financial Conduct Authority (FCA) publish the report “without delay”.
He said: “What we need is a regulator with teeth and who is prepared to bite. What we seem to have is a regulator who first seeks the approval of the banks they are regulating before acting.”
Andrew Bailey, the head of the FCA, was ordered by Treasury Select Committee chair Nicky Morgan to release its report into GRG.
However, Mr Bailey has written to the MP saying that “legal impediments” make it improbable that the FCA will be able to publish before the February 16 deadline.
The legal hurdles include having to obtain the consent of “all persons from whom information was obtained” and “to whom the information relates”.
The law also requires the watchdog to give anyone criticised in the report a “fair opportunity to respond” prior to publication, the FCA said.
While Mr Bailey said that the FCA will write to those named in the report to get consent and to offer them the right to respond to criticisms made, it is unlikely these will be obtained before the deadline.
“Given these legal impediments to which we are subject, we think it is highly unlikely that it will be possible for the FCA to publish the report by 16 February,” his letter read.
However, he added that the FCA will hand over a copy to Mrs Morgan by February 16.
Mrs Morgan said in response: “I am pleased to see that the FCA is trying to get the report agreed for publication or handed to the Committee to meet its deadline.”
The watchdog chief again cautioned the MPs against publishing the report themselves using their Parliamentary privilege.
“If the committee decides itself to publish the report, it will no doubt want to consider carefully the precedent of publishing a document obtained from the FCA under Parliamentary Privilege where the FCA considers that it is legally constrained from publishing the document itself.”
The exchange followed Mr Bailey’s hours-long grilling by the influential committee last week, in which the taxpayer-owned bank’s shortcomings were again under the spotlight.
RBS has been dogged by allegations that GRG intentionally pushed small businesses towards failure in the hope of picking up their assets on the cheap.
An FCA spokesman said the regulator had set out its position on the publication of the GRG report in its letter to Mrs Morgan.
“We are not commenting beyond this,’’ the spokesman added.
Kevin Hollinrake MP, the co-chairman of the All Party Parliamentary Group on Fair Business Banking, said that misconduct involving the big banks has harmed tens of thousands of small businesses. However, most of the victims cannot seek compensation because the banks are too big to be sued, he added.
Mr Hollinrake is calling for the creation of an independent tribunal to oversee complaints about the banks from SMEs.
Mr Hollinrake added: “I have met many business people who have been treated appallingly by their banks and are determined to open up an affordable route to justice. I pay tribute to their tenacity, strength and resolve.”