Government unhappy secrecy in financial services industry
Written on December 9, 2010 by Milton Reyes
The Chancellor of the Exchequer, George Osborne, has ordered a review of the rules involving the secrecy of official inquiries into the banking crisis . He is concerned about why the Financial Services Authority (FSA) will publish a secret report into the failure of the Royal Bank of Scotland (RBS) after an 18-month inquiry.
The Chancellor is understood to be annoyed by the lack of transparency surrounding the publication of the report, which has not been seen by either himself or the present board of RBS, and is looking into changing the law to ensure it canÂ’t happen again.
The FSA recently stated that the Financial Services and Markets Act of 2000 stopped it publishing the report into RBS, which was bailed out by the government with GBP45 billion of taxpayersÂ’ money. Sir Fred Goodwin, the ex-chief executive of RBS, was criticised for the disastrous GBP49 billion acquisition of ABN Amro and for a GBP12 billion rights issue, as well as the size of the enormous pension he was allowed to keep when he left the bank.
Last week, the FSA issued a short press release to the effect that there had been mistakes at the bank but no one had actually broken the law, and refused to provide any more detail on the report because of the 2000 act.
A senior Treasury source was quoted as saying “We’re looking at whether the existing rules strike the right balance between confidentiality and legitimate public interest.”
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