Report into RBS collapse stalled again

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Britain’s financial regulator which failed to avert the 2008 banking crisis is to ask a  Commons committee high flyer to rescue its report into the collapse of the Royal Bank of Scotland after facing a new legal obstacle. The report has faced numerous delays already. The regular – Financial Services Authority (FSA) – is reported to being close to announcing its own failure to publish the report into RBS, which it had originally promised to make public in March.

The chairman of the cross-party Treasury Select Committee, Andrew Tyrie, is reported to discussing his appointment as an “independent validator” of the report while the FSA seeks to limit the damage caused by its delay in publishing the report.

Sources indicate that legal complexities are preventing the FSA in getting a report cleared by RBS lawyers.

The report was promised by the chairman of the FSA – Lord Turner – after the regulator decision not to publish the details of its first investigation met with public opporbrium. However after failing to meet its March deadline and a failure to provide an revised schedule for the report Tyrie has been brought in to reassure the public.

The bank failed at the height of the financial crisis when the worldwide derivatives market experienced a fraud epidemic which engulfed banks owing to complex relationships across the sector.

The FSA did not properly monitor the banks after pressure from Gordon Brown on Lord Turner to regulate with a ‘light touch’ led to a meltdown in the City where most of the RBS’s bondholders and shareholders are based. The taxpayer bail outs were effectively a bail out of the City whereas the popular myth was disseminated that it was a bail out of Scotland.