UK Lawmakers Urge Tighter Business Banking Regulation as RBS Escapes Punishment
June 13 2019 - 1:37PM
Dow Jones News
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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