Andrew Bailey came under fire from the Treasury Select Committee chair Nicky Morgan this morning for the FCA's handling of its first report, claiming that many victims had lost their home, and their mental health had suffered, as a result. She and other MPs criticised the FCA for not making compensation more clear for those affected.
The FCA is now carrying out a second, more focused, investigation into RBS' Global Restructuring Group, which Bailey said had begun during the summer. Although he said it would be shorter than the preceeding investigation, Bailey would not put a timeframe on it, saying: “It depends where it leads to, frankly. It could lead to enforcement action.”
During a thorough examination from Labour MP John Mann, Bailey revealed that this investigation would look at RBS' methodology.
It "goes to the detail of how individuals [decided which companies entered RBS-GRG]," he told MPs, adding there was a "clear conflict of interest" in the fact that fees increased after companies were put into the restructuring group.
After repeated calls for FCA to share more information with the committee, Bailey eventually said he would speak with legal counsel to see what he could release without compromising confidentiality. He stressed the report would have been "bland" and "useless" without relying on confidential information.
A report by the special adviser appointed by Morgan, published during the hearing, backed the FCA's summary of the 300 page report, saying it was overall a fair and balanced reflection.
But it said there were "material omissions" regarding the state of knowledge of GRG’s management about failings in the business unit.
Bailey was himself critical of RBS' boss Ross McEwan for not accepting the FCA's criticisms, which he characterised as being "more of the view" that the bank had engaged in widespread abuse rather than conspiracy.
“The report is strongly critical of RBS, and I think it is frankly unfortunate that RBS has not in a sense accepted that more readily,” he added.
On compensation, Bailey said he has asked McEwan “to get his act together” regarding claims.
“I do believe we are now in the process of getting money back to the victims,” FCA Chairman John Griffith-Jones added.