It would be a relief to say that the sorriest chapter in British business banking history is now behind us, with the formal publication by the House of Commons of a scathing report into nefarious activities at Royal Bank of Scotland, but this is not the case. It is just the latest hairpin bend. You can now download the tidied up ‘official’ version of the report here.
This report has been published under parliamentary privilege rules after the regulator finally fell on its own blunt dagger of ineptitude and refused to publish. That this report has been published at all is because former RBS customer Neil Mitchell and his team leaked it online a week ago. As far as we have been able to tell, the leaked version is the same as the official version except that the official document has various logos on it of Promontory, its authors. It is not however a true electronic PDF, it is rather a scanned paper document that is still not searchable, making research and confirmation much harder. The scale and tone of this behaviour is egregious. The sums of money involved, were RBS to compensate the customers they harassed, would dwarf the already eye-watering PPI bills.
Various estimates but the number anywhere from £1 billion to £100 billion, making a mockery of RBS’s own provision of just £400 million, which as Opal Property Group found out, is barely enough to compensate a single one of the larger customers. The total number of customers affected could be as high as 6,000, and some think this estimate also conservative. What this report shows is that there was wholesale, industrial and systematic behaviour to fleece viable business customers. Some were driven to sickness, lost their homes and livelihoods, and with it all prospect of pursuing the bank through the courts. The only reason this report isn’t on the front pages today is that the most appalling revelations were leaked months ago.
It is worth reminding ourselves that this cavalier approach to customer service, which some customers consider criminal and have contacted police about, was routine at RBS and other banks around the time of the financial crisis. RBS has dodged the truth, and they denied themselves the opportunity to come clean when Lawrence Tomlinson published his own report in 2013. The RBS response was to commission a white-wash report from Clifford Chance, a law firm who had received vast amounts of money on RBS business and continues to do so. The FCA was, to give them credit, so appalled by the revelations that they commissioned the current report at RBS’s expense. However they have given RBS far too much rope, to coin a phrase, and RBS have actually realised now that the momentum is with the Treasury Select Committee. By not blocking publication, they have sided with the TSC and wrong-footed the leaden hooves of Andrew Bailey who, it now transpires, didn’t even have the guts to ask RBS whether they would, please my lord, deign to allow him to possibly offer the report up for public consumption. For this craven inaction and serial incompetence we call for the resignation of the FCA’s Andrew Bailey and his immediate banishment from any future roles in financial regulation.
2020 Update: Andrew Bailey is to be promoted and will be the next governor of the Bank of England itself.