Watchdog now says it will publish RBS report

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The Independent Online

The City watchdog said yesterday that it might be prepared to publish previously secret results of its investigation into events leading up to the rescue of Royal Bank of Scotland.

The move follows a torrent of criticism aimed at the Financial Services Authority from the Chancellor, George Osborne, the Business Secretary, Vince Cable, and most recently Andrew Tyrie, the chairman of the Treasury Select Committee.

Responding to Mr Tyrie's recent letter calling for the FSA to give reasons for not publishing a report, Lord Turner finally said yesterday that he would seek to make it public.

In a letter to Mr Tyrie, he wrote: "I very much agree with the committee that it would be desirable if there were a public account of the reasons for the failure of RBS... The present situation, in which we are unable to release the results of the investigation so far conducted, is extremely unsatisfactory. I therefore believe that a way should be found both to create a more appropriate regime for the future, and to allow the publication of a report into RBS specifically."

Lord Turner and the FSA have come in for sharp criticism in recent weeks, not least because members of the RBS board running the bank during the financial crisis will not face any action from the regulator for the roles they played in its near collapse. The bank is now more than 80 per cent taxpayer-owned as a result.

The only RBS director to have suffered any penalty was investment banking chief Johnny Cameron, who agreed to accept a ban from the City and so never went through the FSA's full disciplinary process. He has indicated that he would like to see the report published.

In his letter, Lord Turner claimed the FSA could only publish with the permission of the bank. He said: "We ... now propose that we ask RBS whether it is willing to give its permission for the FSA to use the information gathered as a key input to the development of a report. It would be useful if the Treasury Select Committee and Government could express support for this course of action."

RBS, which is understood not to have been told the results of the investigation or to have the seen the report, said it would be happy to see a report published.

"RBS has no objection to a public discussion of the key issues which led to its need for recapitalisation during the financial crisis or to a report by the FSA on that topic. Indeed, the new management and board have addressed the subject openly over the last two years," the bank said.

"When the FSA has determined the confidential material it wishes to release publicly, the bank will engage constructively to facilitate publication of the report, subject to any necessary commercial constraints."