By Ed Jacob, via Left Foot Forward
It is now over two weeks since the Royal Bank of Scotland was forced to apologise after computer glitches caused many of its customers to be unable to access their accounts or make transactions.
While NatWest and RBS customers now seem to be enjoying a near normal service, a cross-party delegation of MPs from Northern Ireland, led by Democratic Unionist Party (DUP) deputy leader Nigel Dodds, met in London yesterday with the RBS chairman Sir Philip Hampton to discuss why customers at its subsidiary, Ulster Bank, continue to face major problems.
Indeed, it has been reported that some customers at the Northern Ireland bank may face having to wait until the 16th July before they get fully functioning banking facilities back.
In an industry where sorry has all too often seemed like the hardest word, RBS chief executive Stephen Hester’s apology to Ulster customers may be late, but it’s at least a start.
With the House of Commons today preparing to consider how best to investigate the way the UK’s banking system is operating post Libor-gate, the Belfast Telegraph has revealed that despite David Cameron’s declaration of the situation at the Ulster Bank as not being acceptable during Prime Minister’s Questions, Whitehall is now seeking to pass the buck on the issue.
Writing in yesterday’s edition, the paper’s consumer correspondent, Claire McNeilly, explained:
Top government figures are playing pass the parcel with the Ulster Bank crisis as the plight of thousands of customers unable to access their money in Northern Ireland enters a third week.
On the same day that David Cameron announced a full Parliamentary inquiry into a rate-rigging scandal at Barclays amid a growing wave of criticism of British banks, the prime minister and chancellor George Osborne have refused to intervene in the Ulster Bank frozen cash scandal.
There have been calls for Westminster to take direct control of the situation as the bank still cannot give any guarantee to customers as to when their accounts will be fully functional.
The Belfast Telegraph contacted Downing Street and the Treasury to ask what action they would be taking, but found they were much less forthcoming about dealing with the banking crisis in Northern Ireland than they were when they set up an inquiry into the Barclays rate-rigging furore.
A Downing Street spokeswoman declined to comment, saying it was “a matter for the Treasury”.
But when this paper contacted the Treasury a spokesman for Chancellor George Osborne’s office said the Financial Services Authority (FSA) was in the driving seat, but added that the Treasury was “carefully monitoring the situation”. He said: “The FSA is working closely with the firm to resolve this problem and minimise disruption for customers.”
The FSA, whose chairman is Lord Turner, has said that a full investigation will take place after Ulster Bank has resolved its problems.
The developments, or lack of them, stand in some considerable contrast to Scotland where the Daily Record has declared, as a significant opportunity to lay down the law to the banks, the decision by the Scottish Crown Office to publically announce that it is investigating the conduct of the Scottish banking system. In a statement, the Crown Office and Procurator Fiscal Service (COPFS) explained in somewhat dry legalise:
Given the degree of public concern about recently reported issues in the banking sector, the Crown has decided to confirm that an investigation has been underway for some time. Its scope will now be extended as a result of recent developments. The Serious and Organised Crime Division is leading the investigation.
In calling for the guilty to be “hung out to dry in court”, the Daily Record was more colourful, arguing in an editorial:
At long last, the ordinary laws of the land which ordinary people are obliged to follow may be applied to the self-proclaimed masters of the universe who brought the UK economy to its knees. When Fred Goodwin’s Royal Bank of Scotland invited investors to pump in their money in April 2008, there was barely a mention of the massive problems unfolding on the balance sheets.
Under company law, firms are obliged to be honest and open about looming issues which may affect their financial well-being. The view of most people is that Goodwin’s RBS were neither. And if that means that Goodwin and fellow directors breached their obligations,it is right that the Crown Office investigate, with a view to possible prosecutions.
Legal experts believe it may be easier to prosecute banks under Scottish law, where fraud is a common law offence, rather than down South, where fraud cases are notoriously complex and prone to collapse. If so, it’s a marvellous opportunity for the Scottish legal system to hold Goodwin and his ilk to account.
This article is republished with the permission of Left Foot Forward