Mood against bankers turns even uglier following FSA “whitewash”
December 15th, 2011
Writing in the Monday’s Daily Telegraph Royal Bank of Scotland chairman Sir Philip Hampton said the FSA’s report into the RBS collapse would be “an important contribution to the steps needed to restore public trust in RBS, the banking sector, and our regulators”.
Unfortunately, the report has had no such effect. Indeed, if the comments on today’s Telegraph article about a possible criminal prosecution of Sir Fred Goodwin and other former RBS directors (BIS checks criminal allegations against Goodwin) are anything to go by, the report has further undermined public trust in banking and finance and those who are supposed to regulate it.
This is because the people who wrote the FSA report seem to have set out with the objective of avoiding having to make prosecutions against any senior RBS bankers, and shaped the report around that preconceived goal.
Telegraph readers are incredulous that no-one is being prosecuted, either for the collapse of Royal Bank of Scotland, or for the transparent boardroom deceit that preceded it. Telegraph reader ‘Oldhabits’ commented:-
“Fred Goodwin is a fully qualified Chartered Accountant and as such should have known the difference between assets and losses … Furthermore when he appealed to the shareholders for extra cash to shore up the company he must have known it was insufficient to support the bank’s losses and therefore a criminal act. He hid the truth and should be prosecuted.
Several commenters have dismissed the FSA report as “another useless whitewash” and there is disgust, bordering on fury, that the bankers, regulators and policymakers responsible for the RBS collapse, have “circled the wagons” in the hope they can continue to walk away from the train wreck Scot-free, with their gilt-edged pensions intact. ‘ElvisHasLeftTheBuilding’ wrote:-
“Seeing ‘Sir’ Fred in the dock would just about make my decade. What is taking so long? Is he using all his ex-corporate suck-ups as human shields?”
‘WuffTheWonderDog’ (where do Telegraph commenters get these names?) wrote:-
The Companies Act states that a company is insolvent if it is unable to pay its debts as and when they arise. RBS was patently insolvent, otherwise why did it need to be bailed out by the government?
The Companies Act also states that the directors of an insolvent company have one responsibility, and one alone, and that is to preserve the assets for the benefit of the creditors.
Goodwin and his board of directors did not preserve the assets of RBS for the benefit of the creditors. Instead they transferred millions of pounds into their pensions funds. This was and remains theft.
I have given this information to my MP, Bob Neill, MP for Bromley & Chislehurst, who has refused to acknowledge my e-mails. I have written to the national newspapers but they have refused to publish my letters.
There is a conspiracy to allow these criminals escape the justice that would descend upon me should I withhold a shilling from the Inland Revenue.
Even though the writer has some of his facts wrong (the RBS pension fund is entirely separate from the bank’s reserves) the tone of this comment is spot on. And it’s shameful that Bob Neill, a conservative MP for Bromley, Kent, hasn’t had the courtesy to respond to his constituent’s emails. I wonder if the fact that City of London organisations provide more than half of Tory party funding has anything to do with this?
However, even though the FSA is using specious reasons to justify its failure to discipline any of the ex-RBS directors, it’s worth remembering that the thrust of the Telegraph piece is that, contrary to the mood of impotence and fury evident in some of the comments, criminal prosecutions of former RBS bankers may. yet. happen.
As I said in yesterday’s blog (“Looks like Goodwin may face criminal charges after all“), an edited version of which was published on Huffington Post UK, Vince Cable’s Department of Business, Innovation and Skills (BIS) may yet swoop to the rescue with a last ditch attempt to hold those responsible for the RBS catastrophe to account
In the Telegraph article Louise Armitstead reveals that the BIS has:-
“Instructed lawyers to establish if Sir Fred Goodwin has a criminal case to answer following The Daily Telegraph’s revelations that former directors at Royal Bank of Scotland may have broken accountancy laws.”
“The head of the Insolvency Service at BIS, which is already investigating whether RBS’s former directors could face civil charges, has asked his legal team to check the criminal allegations too. The legal counsel is expected to return its opinion “within days” according to an insider.
Here’s the 27-minute interview I gave last week to Dori Smith of US-based radio station Talk Nation Radio on the wilful blindness of UK regulators to corruption and crime inside UK banks.
Short URL: http://www.ianfraser.org/?p=5684