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FSA “should have intervened” with RBS

FSA “should have intervened” with RBS

Category: Banking

Updated: 19/10/2012
First Published: 19/10/2012

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The Treasury Committee has released a report outlining what it considers to be failings by the Financial Services Authority (FSA) in relation to Royal Bank of Scotland's takeover of the Dutch bank ABN AMRO and the bank's subsequent downfall.

The acquisition, in 2007, cost RBS an estimated £50 billion and was widely believed to have been a catalyst in the near collapse of the bank some months later.

In its report, the Treasury Committee claims that the FSA should and could have intervened in the takeover at an early stage and that the approach taken by the regulator was flawed.

Lord Turner, chairman of the FSA, was also criticised in the report for stating that the review into the downfall of RBS following the takeover, would "add little, if anything, to our understanding of what went wrong".

Commenting on the report's findings, chairman of the Treasury Select Committee, Andrew Tyrie, said: "Without persistent pressure from the Treasury Committee, the FSA's report would never have been published.

"Lord Turner has subsequently admitted that he should have grasped at the time the need for more public explanation. He was right to do so. His personal commitment to the production and publication of the FSA's report has been valuable.

"We now have a comprehensive report that gives a better idea of what went wrong at both RBS and the FSA," he concluded.

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