Banking: Liability.

Lord Haskel Excerpts

Tuesday 7th December 2010 Lords Chamber

Asked By

[Lord Haskel]

To ask Her Majesty’s Government whether the report published on 2 December by the Financial Services Authority regarding the Royal Bank of Scotland finalises the matter of liability.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, on 2 December the Financial Services Authority closed a supervisory investigation into the Royal Bank of Scotland group. The review confirmed that RBS had made a series of bad decisions in the years leading up to the financial crisis, but concluded that enforcement action was not warranted.

[Lord Haskel]

I thank the Minister for that reply. Is he aware that this report fails to respond to the widespread concerns expressed by many people, some of them on his own Benches, that the report deals with the letter, but not the spirit, of the law? Will he tell us how the restructured FSA under the remit of the Bank of England will function more appropriately and take this into account?

[Lord Sassoon]

My Lords, we do not know what the report says because we have not seen it. We cannot say what the report deals with, but it is clear that it concludes that enforcement action is not warranted in this case. The FSA cannot publish the content of the RBS review because information gathered from the bank during the course of the review contains confidential material. The report remains confidential under the Financial Services and Markets Act 2000. I am grateful to the noble Lord for drawing attention to the fact that we are embarked on a process completely to redraw the financial regulatory architecture. I expect that under the new architecture, the new prudential regulatory authority will be able to exercise powers under the tools we give it to minimise the risk of another case like RBS coming up in future.