RBS! I actually had work experience for RBS in Liverpool Street when I was 15 yrs old which is fantastic (in a sarcastic tone)seen as now everyone blames them for the recession that has lead to higher prices and less jobs.
Therefore, it is with great consternation that I can say that The Financial Services Authority have planned to release the RBS report this month. The report exposes the investigation into the bank that took place in May 2009, almost two years ago. The reason for the delay of publication was due to the fact that the FSA were bound by confidentialiy under the Financial Services and Markets Act 2000. However, this argument could be easily countered by the fact that the public should be entitled to know what part the senior executives of the bank had to play in the current economic breakdown. Additionally, this is also supported by the fact that there have been intense and detailed reports about banks that are not state owned for example Northern Rock and The Lehman Brothers "Valukas" report which was massive 40 million pages long. With this in mind and the fact that RBS is 83% government owned, a report exposing the downfalls in the governance of RBS should not be something that should have taken two years to deliberate on.
William Davies in The Business Law Journal [January 2011] volume 32 states that the report would provide "significant benefits". He says that the investigation into whether there were any fudiciary breaches made by the directors would pave the way to judicial reconstruction of the litigation surrounding the governance of banks. By exposing how powerless the laws relating to banks are, could encourage policy makers to make sufficient changes to prevent any future replications of failures in the banking systems.
Additionally, Davies goes on to say that the report will also restore hope in the public that the banks are not uncontrollable and do have strict regimes to follow. The public will gain more faith in the government.
I agree with Davies on the points that it may change the law to be a positive thing. Clearly, the Financial Services and Markets Act 2000 act is too strong a safeguard for the banks and is a law that works against the law itself as it prevents the legal bodies of anaylsis from investigating breach because they could be in breach themselves. This does not make sense.
Moreover, cases such as R v Rollins [2010] establish that the powers of the FSA are growing and are not just limited to offences underlined in ss 402 and 403 of the Finacial Services and Marketing Act 2000 and can now prosecute on money laundering contrary to The Crime Act 2002 ss 327 and 328. These changes highlight that policy makers are not afraid to contradict laws in other areas so why should they be fearful in the banking sector?
However, where I somewhat disagree is that the report will provide a new public confidence. This is because the public are not going to sit and analyse a report that is a million pages long, they will only listen to news summaries and still may not fully believe the investigation.
In conclusion, the reports shall be out very shortly so i guess we will just have to see how detailed the FSA have been allowed to go due to the confidentiality laws protecting the RBS. I do not think that the reports will tell us anything new other than what we have already assumed and may still be limited in comparison to the US "Valukas" Report but should still be published due to principle.
