Despite identifying a number of key factors for the failure, the regulator has been unable to point a finger at a single person or hold anyone accountable for the failure of the bank.
This isn’t news. The regulator had previously said decisions were not caused by a “lack of integrity” or any instances of fraud or dishonest activity.
Adair Turner, chairman of the Financial Services Authority (FSA), says its enforcement team had not been confident in securing a victory.
This is understandable, as Turner points out there is no “strict liability” concept within the relevant law or FSA rulebook for a bank failure to hold management or the board to account. Neither are “errors of commercial judgement” sanctionable.
The FSA says there were flaws in the regulatory regime. Arguably, the regulator is a different beast now to what it was at the height of the credit crunch.
Yet, it still feels wrong. That nobody was to blame for the failure, seems perverse.
Royal Bank of Scotland Group are contrite. The FSA knows that it can’t be blamed.
Peter Vicary-Smith, chief executive of Which?, is right when he says a similar bank failure should never be allowed to happen again.
“The FSA report is a damning document. It reveals the inherent flaws in a corporate culture that focuses on bonuses and short-term profits,” he opines. “Senior executives have been handsomely rewarded whilst taxpayers are sitting on a £26 billion loss from their stake in RBS.”
It’s nobody’s fault but we’ve all lost out.
You can find all the documents here.