The All Party Parliamentary Group on Fair Business Banking and Finance (APPG) has said that a “truly independent tribunal” is needed to help rebuild the reputation of the banking sector.
The APPG has warned that, without such a body, the legacy issues that blight the lives of businesses and tarnish the financial services industry will not be resolved.
It’s been revealed that the City watchdog has bowed to pressure from MPs for independent legal scrutiny of a report into alleged mistreatment of small businesses at Royal Bank of Scotland.
Financial Conduct Authority (FCA) chief executive Andrew Bailey has agreed to a proposal from the Treasury Select Committee to appoint a legal adviser to compare the regulator’s soon-to-be published summary with the underlying report into RBS’s controversial restructuring unit.
The move comes after the committee - headed by new chairwoman Nicky Morgan - last week wrote to Mr Bailey threatening to use its “formal powers” to demand publication of the leaked report if its request was denied or if it was not happy with the findings.
In response, Mr Bailey agreed to give the summary and full report to the legal adviser - set to be Andrew Green QC - to assess whether it is a “fair and balanced summary”.
But he stressed in a letter to Ms Morgan that this would be “an exceptional case and does not establish a precedent”.
Following a review by the committee’s adviser and the FCA’s own legal adviser, the regulator will publish a final account.
Ms Morgan said: “The advisers will now start their work and report to the committee before Mr Bailey’s appearance at the end of the month.
“If the advisers’ report does not provide the committee with the assurances it needs, it will decide whether any further steps are required.
“There is no good reason for the committee’s review to delay the FCA from publishing its summary as soon as possible.”
The FCA has so far refused the committee’s demands to publish the report in full, claiming it would reveal confidential information about individuals, and has instead offered a detailed summary.
The committee intervened in the saga last month, calling for publication of the report into alleged misconduct at the bank’s Global Restructuring Group (GRG) following a leak to the BBC in August.
Mr Bailey pushed back, saying that publishing the skilled persons or Section 166 review - which collects insight about a firm’s activities from third parties - would mean revealing confidential information about the individuals who contributed to it.
But in his latest letter to Ms Morgan, he said the report and confidential information can be seen by legal advisers using a so-called “self-help gateway”.
An APPG spokesman said: “The APPG has been pressing for the release of this report for some time, so we are glad to see some progress. Businesses affected by GRG have been waiting for years for clarity. It remains to be seen whether the summary is sufficient and there will inevitably be questions as to what FCA chooses to leave out, and why.”
An RBS spokesman said: “The FCA’s announcement last November made clear that all SME customers transferred to GRG were exhibiting clear signs of financial difficulty. It also made clear that, in a significant majority of cases, it was likely RBS’ actions did not result in material financial distress to these customers.
“At the time we acknowledged that in some areas, in the aftermath of the financial crisis, we could have done better for some SME customers in GRG.
“We have apologised for this and taken steps - that the FCA agreed were appropriate - to put things right for our SME customers in GRG during the relevant period, including a new complaints process overseen by an independent third party - Sir William Blackburne, a retired High Court Judge – and an automatic refund of complex fees paid by these customers.”