12/12/2011
'Poor Decisions' Caused Royal Bank Of Scotland Problems
A report into the near collapse of the Royal Bank of Scotland in 2008 was caused by "poor decisions", according to a report published on Monday.
The findings by the Financial Services Agency (FSA) said poor management decisions, inadequate regulation and a flawed supervisory system led to the bank's near failure.
FSA chairman Adair Turner said the organisation's approach was "seriously flawed" and admitted its own supervision was "flawed" and "provided insufficient challenge" to RBS.
Responding to the statement, Business Secretary Vince Cable said he had commissioned the report so that lessons could be learned from one of the largest ever bank bailouts.
"The Government has already taken steps to make our banking system safer and create a culture of responsible capitalism. We are strengthening the regulation of financial services and implementing the Vickers Report on Banking," Mr Cable said.
He added: "But we need to consider if there are other aspects that need looking at. My Department is responsible for corporate governance and the regulation of directors’ duties and conduct."
However, despite the findings, the Business Secretary said the he had been advised it would not be appropriate to bring proceedings against the bank's directors on the information contained in the report.
"Now that I have received the FSA’s report, I am immediately instructing Counsel to provide further advice on what course of action is open to me,” Mr Cable said.
The FSA said RBS' capital position was too weak to proceed with the takeover of parts of the Dutch bank ABN Amro. The £49bn purchase took place at the height of the financial crisis in 2007.
(DW)
The findings by the Financial Services Agency (FSA) said poor management decisions, inadequate regulation and a flawed supervisory system led to the bank's near failure.
FSA chairman Adair Turner said the organisation's approach was "seriously flawed" and admitted its own supervision was "flawed" and "provided insufficient challenge" to RBS.
Responding to the statement, Business Secretary Vince Cable said he had commissioned the report so that lessons could be learned from one of the largest ever bank bailouts.
"The Government has already taken steps to make our banking system safer and create a culture of responsible capitalism. We are strengthening the regulation of financial services and implementing the Vickers Report on Banking," Mr Cable said.
He added: "But we need to consider if there are other aspects that need looking at. My Department is responsible for corporate governance and the regulation of directors’ duties and conduct."
However, despite the findings, the Business Secretary said the he had been advised it would not be appropriate to bring proceedings against the bank's directors on the information contained in the report.
"Now that I have received the FSA’s report, I am immediately instructing Counsel to provide further advice on what course of action is open to me,” Mr Cable said.
The FSA said RBS' capital position was too weak to proceed with the takeover of parts of the Dutch bank ABN Amro. The £49bn purchase took place at the height of the financial crisis in 2007.
(DW)
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Northern Ireland WeatherToday:A sunny but frosty start for many. However cloud increases by midday with a few showers reaching the north coast, these mostly light but spreading inland this afternoon. Chilly. Maximum temperature 8 °C.Tonight:A rather cloudy evening with scattered showers. Becoming drier through the night with some good clear spells developing and a patchy frost away from coasts. Minimum temperature 0 °C.