Sir Fred Goodwin and his 16 fellow directors of Royal Bank of Scotland appear to have walked away scot free from their disastrous takeover of ABN Amro and the subsequent £45.5bn taxpayer bailout.
The long-awaited 452-page report by the Financial Services Authority into the failure of RBS decided the regulator had not been able to find evidence to take action against the directors. But the report said: "RBS's board does not appear to have been sufficiently sensitive to the wholly exceptional and unique importance of customer and counterparty confidence in a bank. As a result, in our view, the board's decision-making was defective at the time.
"RBS believed in its ability to integrate businesses successfully after the acquisition of NatWest; in the case of ABN Amro, it underestimated the challenge of managing the risks arising from the acquisition."
Lord Turner, the FSA's chairman, revealed that the regulator delivered its Enforcement Division's evidence, including a report commissioned from PwC, to Vince Cable's Department for Business back in February. That department has the power to disqualify individuals from acting as directors.
Lord Turner said: "We followed the normal process between different enforcement agencies. We felt that the test under the Companies Act would be easier to fulfill than the burden of proof needed by the FSA. But given we handed that evidence over almost a year ago, you can draw your own conclusions."
Sir Fred escaped enforcement action by the FSA and walked away from Royal Bank of Scotland with a pension worth £342,500 a year. But he is heavily criticised in the report, including by some of his former colleagues. Johnny Cameron, the former head of RBS's investment bank, told FSA officials: "Fred had a well-honed approach to acquisitions and it all revolved around those two things – what are the revenue synergies and what are the cost synergies? It's sort of, once the boat had been launched and you said these are the cost and revenue synergies, there was a bit of tidying up around the edges, but not a lot to be done."Reuse content