By Simon Duke Britain's top financial watchdog claimed that European Union and domestic laws prevent him from publishing a forensic report into the near collapse of Royal Bank of Scotland two years ago. Hector Sants, chief executive of the Financial Services Authority, said regulators around the EU are barred from making public information garnered through an investigation without the consent of the individuals and companies involved. Under questioning yesterday, Sants conceded he was 'extremely sympathetic to those who argued that the FSA should publish the report'. Osborne's new regulatory regime: FSA to be dismantled by 2012 - Bank of England to oversee big lenders However, he maintained that the probe into the RBS debacle, which cleared former boss Sir Fred Goodwin of any wrongdoing, was not 'actually a report we can put immediately' into the public domain. It would take the FSA 'several months' to turn the investigation files into a readable form, Sants added. The watchdog cited the Financial Services and Markets Act from 2000, which bars the publication of sensitive material without permission of the key players. But many of the protagonists in the RBS saga have signalled that they would not stand in the way of the FSA's probe being placed in the public domain. Goodwin has indicated he would not seek to prevent publication. It is understood that his successor at RBS, Stephen Hester, would be happy for the investigation to be disclosed, as long as it did not contain information that would harm the group. As pressure for full transparency mounted, Sants warned he is battling to keep key staff who have been unsettled by the government plans to dismember the FSA by 2012. Under George Osborne's overhaul of financial regulation, supervision of Britain's banking sector will pass to the Bank of England under its new Prudential Regulatory Authority. The new Financial Policy Committee, also under the aegis of the Bank, will assume powers to prevent dangerous build-ups of credit. The rump of the FSA will become a consumer protection agency. Sants, who will become a deputy governor of the Bank of England, acknowledged that oversight of the financial sector could fall short of current levels during the transition to the new regime. 'There will be a marginal increase in the probability of a risk crystallising for our lower impact firms,' including independent financial advisors and small mortgage brokers, he admitted. By ALEX BRUMMER The Financial Services Authority's refusal to publish the supervisory report into the near failure of the Royal Bank of Scotland threatens to damage the reputation of its leaders, chairman Lord Turner and chief executive Hector Sants. FSA boss Sants claims that he cannot publish without the permission of the individuals and banks concerned. But it is our understanding that neither Stephen Hester, the chief executive brought in to clean up the mess at RBS, or his predecessor Sir Fred Goodwin would oppose publication. Alex Brummer: The FSA's refusal to publish the report into the near collapse of RBS threatens to damage the reputation of its leaders Indeed, the forensic report - prepared by accountant PricewaterhouseCoopers - might clear the mystery surrounding the events which led to the biggest banking bail-out in British history. Sants, who is scheduled to move to the Bank of England to take charge of prudential regulation, argues that the FSA is prohibited by UK and European law from publishing details of a supervisory probe. The latest effort of the FSA to defend itself - by hiding behind European law - is a little like the legalistic explanations given by the Bank of England when it failed to pursue a merger for Northern Rock in the summer of 2007. When far bigger deals, such as the Lloyds TSB takeover of HBOS, came into view a year later, there were no such niceties. Instead of the FSA taking the high road and insisting it wants publication in the interests of transparency and open government, it seems intent on heading in the opposite direction. Sants argues that it would take several months to turn the report into a publishable document. If that is the case then the FSA should immediately put a team of people together and work to get it released. It would be extremely useful to Parliament - which has to steer new regulatory legislation through the Commons in the spring - if MPs and the Lords had the full facts before them. The real curiosity is that the Treasury and RBS are as much in the dark as everyone else. At least, however, the Treasury is looking at ways of overcoming the 'confidentiality' issue by seeing if legislation can be amended to introduce a 'public interest' test which allows release. This could well be attached to a new financial services bill. None of this should, however, prevent Sants or Turner from ordering that work begin on versions of both the RBS and upcoming HBOS reports to put them in a form that could be released. The FSA may be losing staff ahead of the coming reorganisation but it is hard to believe that it could not assemble a team (using outside consultants if necessary) capable of translating the crude work into something readable. It is not rocket science.E U laws prevent publication of RBS report says watchdog
Last updated at 10:32 PM on 13th December 2010
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Read more: http://www.dailymail.co.uk/money/article-1338305/EU-laws-prevent-publication-RBS-report-says-watchdog.html#ixzz18DNixMbcCOMMENT by ALEX BRUMMER:
Lame excuses from the FSA
Last updated at 8:39 AM on 14th December 2010
Read more: http://www.dailymail.co.uk/money/article-1338326/Lame-excuses-FSA-rufusal-publish-near-failure-RBS-report.html#ixzz18DGGwGYx
Wednesday, 15 December 2010
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- Ethel, London, 15/12/2010 01:14
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