Andrew Bailey, the chief executive of the Financial Conduct Authority, has told MPs on the Treasury select committee that publication of information in the report could be a criminal offence under the Financial Services and Marketing Act.
In a letter to Nicky Morgan, the conservative MP who chairs the committee, Bailey said publishing the report could also undermine the regulators’ ability to supervise firms because reviews are conducted on the basis that they will remain private.
That promise of privacy, he said, meant firms don’t try to withhold information and the watchdog doesn’t have to use its legal powers to force its release. “I am very keen that this situation should continue and that it would not be in the public interest to limit the effectiveness of this process,” Bailey said.
The FCA told the bank, which is 70% owned by the taxpayer, to commission the report after allegations were made about the way its business restructuring unit – the global restructuring group (GRG) – treated small business customers. Instead of helping to turn them around, businesses said they had been weighed down by debt and fees.
Morgan wrote to Bailey to ask for the report, which was completed last year, to be published after it was leaked to the BBC earlier this month. She said the leak strengthened calls for it to be published in full, rather than just the detailed summary the FCA had previously promised to release.
“The report is now in the hands of an unknown number of third parties. If closure is ever to be brought to this long-running issue, parliament and the public need the account ordered by the regulator … we consider that the public interest in publication in this specific case is overwhelming.” she said.
The committee has the power to demand the report, which it could then publish, but it has not resorted to this.
RBS attempted to draw a line under the long-running dispute with small businesses last year by putting aside £400m to pay compensation. This has not, however, dimmed the anger of some of the business who have been complaining for years about GRG’s treatment.
Bailey and colleagues will be called next month to give evidence to the new committee, which held its first meeting since the general election on Thursday. They will face questions about the GRG report.
A leak inquiry is under way and Bailey said the FCA had asked RBS, the consultancy Promontory Financial Group, which was commissioned to do the report and the accountancy firm Mazars which wrote it, to do the same.
Bailey said a detailed summary of the report, known as section 116, will be published and that the FCA has appointed outside lawyers to analyse it. Approval from RBS and Promontory is needed to publish. He hopes to avoid Maxwellisation, the process by which individuals named in reports have an opportunity to comment on any criticism.
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