The Banker

For a while I ran an online magazine called The Z Review with some friends in New York City. We had a blast, didn’t make any money, but made some lasting friendships. For part of that work, I ran a multi-part series investigating the bank RBS and its treatment of business customers. The investigation incorporated many aspects of British public life, including the government and financial regulators near the top, down to very small one-person businesses across the UK. The customers were primarily builders and tradespeople employing less than ten others.

One of my abiding memories of that time was a period when the British regulator, the FCA, was refusing to release a report of almost 400 pages on the grounds that it identified individuals. This meant, or rather, they claimed it meant, that they had to seek the permission of those individuals before publishing the report. I believed it was a lie at the time, and I still believe it.

It became clear that they would be forced to publish the report, but this process was dramatically sped up by the memorable work of Neil Mitchell. Neil had seen various copies of the report, and appeared reluctant to share it because of his genuine fears that the leakers would be found out. Although Neil was an RBS customer, his focus was on compensation. He knew that those doing the leaking still had careers in financial services and were taking enormous risks to share the report. The TV and media personality Noel Edmonds also claimed to have a copy, but likewise was reluctant to share it.

Over a period of weeks, Neil set up the technical mechanism for sharing this embargoed report, using an offshore server and intermediaries. His determination to get the truth out led within days to the official release of a redacted copy by the regulator itself.

The most striking thing about the report was just how mundane it was. No individuals were identified and it was impossible to understand who the FCA had been trying to protect. The only conclusion I could draw was that the refusal to publish was just a part of a complex plan to obfuscate and delay. The report is not the thing the FCA wanted to hide. What they wanted to hide was their collusion with RBS to protect not only the bank but its more nefarious activities in deliberately stressing viable businesses for their own profit.

For me, that was the most appalling part of this time. The unit of the bank which had been specifically set up to help and turn around businesses, the GRG, was in fact using very aggressive behaviours to stress the customers. They would coerce them into taking products and making decisions that led to them losing control of their own businesses. Once RBS had control, they would run down the businesses and extract whatever fees and profits they could get their hands on. The individual customers were sometimes left without their family home, with damaged reputations, and they were left feeling angry with nobody to help them. Many of them took on personal debt to try and save their companies. This is how the banks and other lenders can break the protections offered by a “limited” company which seeks to protect individuals from business failures. By taking on personal debt in their own name, they were liable to become bankrupt. By forcing this behaviour, the lenders ensure that the customer has “skin in the game” and is deemed less likely to run a business into the ground. This setup assumes that the customer is somehow reckless, and the lender, a venerable and ancient institution, faultless. In my experience the truth was exactly the reverse.

And yes, the man at the FCA who presided over this shambles is the future governor of the entire Bank of England.

And so, with a little trepidation, I am dusting off the best of the content from those Z Review days to make sure that I don’t lose track of an important period in my life. But it was even more important to those customers who had been failed by RBS, a brand that prior to its acquisition of ABN Amro, was one of the most respected in global banking. That story, the way RBS brought itself to its knees literally weeks before the 2008 financial crash, led directly to the behaviours described above and continue to blight RBS today. The situation is so bad that their new CEO has been quietly planning to remove the RBS logo from its offices in London, as its branches have disappeared from the high street. In England, the brand remains more toxic than reactor four at Chernobyl.

Update 14 February 2020: RBS has today announced it will become NatWest Group by the end of the year. This marks the final demise of the ancient and once-revered Royal Bank of Scotland.

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