MPs will today launch a devastating attack on City watchdogs in a move which could wreck Lord Turner's bid to become Governor of the Bank of England.
They accuse the Financial Services Authority under his chairmanship of showing an "astonishing lack of appreciation of the understandable public interest in the failure of Royal Bank of Scotland" following the watchdog's decision to explain its decision not to take any disciplinary action over the bank's failure in a 298-word statement.
In a strongly worded report, the Treasury Select Committee, which was instrumental in forcing the FSA to publish a critique of its oversight of RBS, goes on to lambast "serious flaws in the culture and governance of the regulator".
It angrily criticises what it says was "a fundamental misunderstanding of its duty to account for its actions to the public and Parliament".
And it contains wounding personal criticism of Lord Turner, describing the FSA's critique as "a serious indictment of both the senior management and leadership, and in particular the chairman and chief executive (Hector Sants), in place at the time, and their predecessors, regardless of the prevailing assumptions and political pressures".
That will be a bitter personal blow to Lord Turner, who is currently rated the third favourite to become Governor of the Bank behind Sir John Vickers, the former head of the Office of Fair Trading who led the Government's Independent Commission into Banking, and favourite Paul Tucker, a current deputy governor.
However, Andrew Tyrie, the committee's chairman, did offer him some words of comfort, saying: "Lord Turner has subsequently admitted that he should have grasped at the time the need for more public explanation. He was right to do so.
"His personal commitment to the production and publication of the FSA's report has been valuable."
The MPs' report, nonetheless, calls into question the FSA's assertion that it didn't have a formal basis on which to block RBS's disastrous takeover of and attempt to break up ABN Amro in concert with Spain's Banco Santander and Belgian bank Fortis.
"The argument put forward in the FSA's report, that the absence of a formal statutory basis to intervene was sufficient justification for regulatory inaction, was contradicted by the evidence."
The MPs say that the watchdog could and should have acted. They want the new Prudential Regulation Authority (PRA), which will be run by the Bank of England and oversee banks, to be given an explicit duty to approve or block future deals.
The committee also wants the Parliamentary Commission into Banking Standards to scrutinise the PRA's approach, which will likely happen. Mr Tyrie chairs both. Regulators have been urged to report on how disciplinary processes can be improved to more easily call individuals to account.
The MPs also call for new laws to give them the power to force regulators to review past work when problems occur in future: "We would not, however, expect a properly functioning board to need such prompting from Parliament to conduct such reviews."
The report also takes aim at the Bank of England. While its Court has commissioned three reviews into the Bank's actions during the financial crisis the MPs' report says: "By waiting so long before conducting any review, the Bank of England has diminished its value as a guide to better regulation for the future.
"Any lessons learned as a result of even these limited reviews will also only be available in a very late stage in Parliament's consideration of the Financial Services Bill.
"Incorporation of them into legislation may therefore be more difficult and this is regrettable."
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