LONDON (Reuters) - Britain’s financial watchdog should get new powers to regulate business loans after it was unable to punish Royal Bank of Scotland (RBS.L) for its “deficient” treatment of customers, lawmakers said on Tuesday.
FILE PHOTO: Royal Bank of Scotland signs are seen at a branch of the bank, in London, Britain December 1, 2017. REUTERS/Peter Nicholls/File Photo
The Financial Conduct Authority (FCA) announced on Tuesday it was taking no enforcement action against the bank or staff in its Global Restructuring Group (GRG) unit, accused by small firms of stripping their assets between 2008 and 2013.
FCA Chief Executive Andrew Bailey said on Tuesday that the watchdog’s powers to take action against GRG were very limited given that commercial lending is largely unregulated.
“After carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success,” Bailey said in a statement.
The powers parliament gave the FCA, created in the aftermath of the financial crisis, do not enable it to take disciplinary action such as fining RBS or an individual, the watchdog said.
The RBS unit has been accused by customers of driving them to bankruptcy in order to pick up their assets on the cheap.
The FCA’s review found no evidence that RBS transferred otherwise viable small businesses to GRG to profit from their restructuring or insolvency.
“It did, however, identify that many aspects of GRG’s culture, governance and practices were deficient and that in some areas the inappropriate treatment of customers was widespread and systematic,” the FCA said.
“These failures are significant and might ordinarily trigger disciplinary action
