Mortgage News
RBS repeatedly made ‘bad decisions’ but FSA dismisses fraud
The FSA has cleared RBS of acting fraudulently during the purchase of ABN AMRO, but censured it for making a “series of bad decisions” in the run up to the financial crisis.
In a 20-month investigation into the bank in the wake of its taxpayer bailout in 2008, the regulator scrutinised the conduct of RBS’ senior individuals, the acquisition of ABN AMRO in 2007 and the 2008 capital raisings.
RBS made “a series of bad decisions” in the years immediately before the financial crisis, most significantly the acquisition of ABN AMRO and the decision to aggressively expand its investment banking business, the FSA said.
However, it ruled these bad decisions were not the result of a lack of integrity by any individual, or fraudulent or dishonest activity by RBS senior individuals, or a failure of governance on the part of the board.
No enforcement action will be taken against the bank or individuals, but the FSA said the competence of RBS staff can, and will, be taken into account in future applications made by them to work at regulated firms.
The regulator said it will not publish information gathered from the bank during the course of the review due to confidentiality rules under the Financial Services and Markets Act 2000 (FSMA).
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FSA investigations into other banks which failed during the crisis are ongoing.