By Adam Clark

 

U.K. lawmakers reiterated calls for stricter regulation of business lending, after the Financial Conduct Authority confirmed it won't punish Royal Bank of Scotland Group PLC (RBS.LN) over the past actions of a controversial restructuring unit.

The FCA said Thursday that an independent counsel has affirmed the regulator's determination that it doesn't have the powers to take action against either RBS or any individuals involved in the bank's Global Restructuring Group. The FCA first made the decision in July 2018.

GRG has been accused of squeezing cash out of small-business customers that it was meant to be helping from 2008 to 2013. An independent review commissioned by the FCA previously found that there was "widespread and systematic" inappropriate treatment of customers, but no evidence that RBS artificially distressed businesses or forced them into insolvency.

"Our investigation has found that GRG clearly fell short of the high standards its clients expected but it was largely unregulated and so our powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited," Andrew Bailey, chief executive of the FCA, said Thursday.

RBS said it welcomed the conclusion of the investigation and is committed to ensuring "past mistakes" won't be repeated.

Lawmakers on the parliamentary Treasury Committee said the FCA should be given greater powers to regulate commercial lending.

"This long overdue report will offer no solace to those who suffered from the disgraceful actions of RBS's GRG," committee chairwoman Nicky Morgan said.

 

Write to Adam Clark at adam.clark@dowjones.com

 

(END) Dow Jones Newswires

June 13, 2019 13:22 ET (17:22 GMT)

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