More RBS Muddy Waters

Yet more muddy water involving banks and politics……who’d have thought it!

 

The Story......

 

Business Secretary Vince Cable has referred the state-backed (80% tax payer owned) RBS to the City regulator (Financial Conduct Authority) amid renewed allegations over its treatment of struggling business customers.

 

The Accusations……

 

RBS has engineered the transfer of a significant number of business customers into a specialist division which manages the bank’s problem loans in order to profit from the higher fees it can charge.

 

RBS frequently appoint favoured accountancy firms to oversee the work-out process, resulting in the outcome desired by the lender but which sometimes entails companies being placed in administration.

 

My Thoughts……

 

We can debate long and hard about the moral position (or lack of) within the banking sector, but ultimately they will push the limits to the extreme for the benefit of their bottom line.

 

The morality of banks is not the issue here……why has it taken a politician to refer this to the regulator? Why has the Financial Conduct Authority not uncovered this as the regulator?

 

There can only be two explanations: (1) The regulator is incompetent and / or (2) no rules have been broken.

 

Inexcusable either way.