David Prosser: If the regulator fails to explain its role in RBS debacle its report will be a whitewash

Outlook Who should be most nervous about the publication on Monday, finally, of the Financial Services Authority's report into the collapse of Royal Bank of Scotland three years ago? The answer, though it may surprise you, is not the former executives of RBS, whose poor decisions brought one of the world's largest financial institutions to its knees. Rather it is senior officials at the regulator itself who have most to lose.

Is that why the FSA was so keen not to publish the results of its inquiry into RBS's failure? This report has had to be dragged out of the regulator, which claimed it had secured legally sensitive and commercially private information from the parties involved on the basis that it would be kept out of the public domain. Given that the story of how the FSA failed to intervene as RBS headed for the precipice is as big a part of this saga as the bank's own mis-steps, one has some suspicions about the regulator's motives.

The row over the FSA's determination to keep its deliberations private was prompted by its brief announcement, more than a year ago now, that it planned to take no further regulatory action against any individual at RBS. That left former head of investment banking Jonny Cameron as the only RBS executive to have been censured over the affair – and Sir Fred Goodwin and Sir Tom McKillop, the bank's former chief executive and chairman, in the clear.

Remarkably, however, those who have had access to drafts of the FSA report to be published next week say the work of those two men, who became poster boys for Britain's banking crisis, is not at its core. Only the regulator can explain why that is so.

Nor will it be the only question the FSA has to answer on Monday. If the regulator's report fails to explain how and why it failed to intervene when RBS shelled out £10bn for ABN Amro in the autumn of 2007, it will be a whitewash. This, after all, was a deal that undermined RBS's capital strength a full six months into a sub-prime lending crisis. The regulator appears not to have noticed the poor quality of the due diligence undertaken by RBS, which only a few months later had to make huge writedowns on the assets it had acquired and launch what was then the UK's largest ever rights issue.

What, moreover, will the report say about FSA chief executive Hector Sants, who was head of wholesale banking regulation at the time of the ABN deal? Mr Sants will shortly become a deputy Governor of the Bank of England (which, for that matter, isn't immune from criticism).

For many at the regulator, this is going to be a weekend of apprehension. On Monday morning the FSA's senior management team can expect to be attacked all over again for the failures of the financial crisis, or attacked for failing to address them.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
News
An iceberg in Ilulissat, Greenland; researchers have been studying the phenomena of the melting glaciers and their long-term ramifications for the rest of the world (Getty)
news
Environment
environment
Arts and Entertainment
Hugh Jackman bears his claws and loses the plot in X-Men movie 'The Wolverine'
film
Arts and Entertainment
'Knowledge is power': Angelina Jolie has written about her preventive surgery
film
News
Zayn has become the first member to leave One Direction. 'I have to do what feels right in my heart,' he said
peopleWe wince at anguish of fans, but his 1D departure shows the perils of fame in the social media age
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing