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
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooksA special investigation by Andy McSmith
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn