You are here: Home - News -

FCA abandons disciplinary action against RBS GRG senior managers

by:
  • 31/07/2018
  • 0
FCA abandons disciplinary action against RBS GRG senior managers
The Financial Conduct Authority will not be taking disciplinary action against the senior managers involved in the Royal Bank of Scotland (RBS) Global Restructuring Group (GRG) scandal.

 

The regulator said it did not condone the actions taken by the RBS GRG management but as many of the activities were unregulated it had “very limited” powers and any action taken “would not have reasonable prospects of success”.

GRG operated from 2005 to 2013, and at its peak handled 16,000 companies. It targeted small and medium-sized enterprises which were in financial difficulty and then exploited this vulnerability.

The investigation into the affair by the Treasury Select Committee found evidence of “endemic” misbehaviour by GRG staff, where in certain instances they were told to “pick a number, any number” when deciding what fees to charge struggling firms.

 

Mistreatment of customers

In a statement update about its own investigation, FCA chief executive Andrew Bailey (pictured) said the regulator had consulted with independent, external leading counsel who had confirmed the FCA’s conclusions were correct and reasonable.

“It is important to recognise that the business of GRG was largely unregulated and the FCA’s powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited,” said Bailey.

“Taking action was therefore always going to be difficult and challenging but after carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success.

“I appreciate that many GRG customers will be frustrated by this decision but we have explored all the options available to us before arriving at this conclusion,” he added.

 

Hold senior managers to account

Bailey also noted that the FCA’s Senior Managers Regime which was introduced in 2016 meant the regulator was now able to hold senior management of banks to account for the way they treated their SME customers.

“The fact that we can’t take action in no way condones the behaviour of RBS,” Bailey said.

“We expect high standards from the firms we regulate and RBS fell well short in its treatment of GRG customers.

“We feel strongly that those companies that have suffered loss as a result of how they were treated whilst in GRG must be appropriately compensated. We are closely monitoring the complaints process overseen by Sir William Blackburne, an independent third party, to ensure that things are put right,” he added.

 

 

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Stamp duty cut helps 121,500 first-time buyers save £284m

Last year's stamp duty cut has helped almost 121,500 first-time buyers save a total of £284m, according to the government.

Close