Financial Services Authority could face legal action
The Financial Services Authority has refused to publish its report on the near collapse of the Royal Bank of Scotland and could now face legal action for doing so. Investors in the US are keen to know the findings of the report in a bid to seek compensation. RBS was bailed out at the height of the financial crisis in 2008 to the tune of $20 billion and is now 70% owned by the taxpayer.
The FSA has recently cleared Royal Bank of Scotland's former CEO Sir Fred Goodwin of any wrongdoing but will still not publish the report on the grounds that it will breach confidentiality. The chief executive of the FSA Hector Sants has argued that they are prohibited by UK and EU law from publishing details. He also claims that it would take months to turn the report into a coherent document.
Lawyers representing US investors who are seeking compensation after the bank's near collapse may force them to do so. The American investors are not alone with the Business Secretary Vince Cable criticising the FSA for its lack of transparency. Sir Goodwin has also stated that he would not oppose publication.
The FSA is currently undergoing a re-structuring in an effort to cut costs. It may also come under increasing pressure in the coming months to publish the report.