The Royal Bank of Scotland has hit back at claims it is engaged in corporate bullying, by questioning smaller brokers' appetite for underwriting riskier rights issues.
The chief executives of Panmure Gordon, Numis and Evolution wrote to City minister Lord Myners last week claiming: "The behaviour of taxpayer-funded banks is stifling competition in the capital markets."
They added: "The Government should ensure that state-backed banks can only win investment banking business on their merits rather than on the basis of taxpayer-funded balance sheets and 'corporate bullying'."
Lord Myners has promised to investigate the claims. But a senior source close to RBS said: "This is sour grapes. They have, in some instances, proved themselves to be flaky on underwriting. RBS is winning business because it deserves to."
Tim Linacre, Panmure Gordon's chief executive, responded: "The independent brokers are well capitalised and have shown a willingness to underwrite issues in difficult markets."