RBS failure report to be reviewed

A report which cleared Royal Bank of Scotland of any wrongdoing in the run-up to the financial crisis is to be reviewed, it has been announced.

The Treasury Committee said the results of the investigation by the Financial Services Authority would be looked at by independent experts.

The FSA said last year that RBS made “a series of bad decisions” but there was no fraudulent or dishonest activity.

Controversially, the report has not yet been published in full.

RBS and the FSA have clashed over whether the report should be published in its entirety. After revealing a brief outline of its findings last December, the FSA pledged to publish a limited version in March, but this has not yet happened.

The independent review, which has been welcomed by the FSA, is designed to ensure that what is eventually published is a fair reflection of the findings of the investigation.

“There is strong public interest in having a clear account of the causes of RBS’ failure,” said FSA chairman Lord Turner.

“The appointment of the independent reviewers will provide public assurance of the report’s openness and contribute to its quality.”

As well as looking into the causes of RBS’ failure, the independent review will also look at the FSA’s regulation and supervision of RBS and “identify any deficiencies and actions taken by the FSA subsequently”, a statement from the committee said.

“We need to know the decisive mistakes which destroyed RBS, how they came to be made, whether the FSA was asleep at the wheel, and whether we can have confidence that they are awake now,” said chairman of the Treasury Committee Andrew Tyrie.

The review will be carried out by Sir David Walker and Bill Knight. Sir David is a former senior banker who led the 2009 government inquiry into the rules governing how banks are run.

Mr Knight is a solicitor and chairman of the Financial Reporting Review Panel, which looks at the standards of financial accounts in the UK.

RBS is now 84%-owned by the government after it had to be bailed out during the financial crisis.