FCA chief confirms public inquiry appropriate forum to investigate the APA

The APPG welcomes today’s comments by the Chief Executive of the FCA, Andrew Bailey, that any further investigation of the role of the Asset Protection Agency (APA) in the mistreatment of SMEs by RBS’s GRG unit should conducted as a public inquiry.

In an evidence session with the Treasury Select Committee (TSC), Andrew Bailey today confirmed that the FCA’s report represented the full extent of their investigation into the influence of the Asset Protection Agency (APA) in RBS’s GRG unit and that “if an investigation is wanted it should not be by us, it should be a public inquiry”.

It is evident, both from the FCA’s final report and today’s evidence session, that even after a five-year investigation, the FCA have not established the ‘root causes’ of the mistreatment or adequately investigated the exact role and influence of the APA. It is still not known whether the APA influenced the “systematic and widespread mistreatment” of SMEs within GRG”. The report fails to fully establish this crucial aspect of the GRG scandal and only includes testimony from one senior manager, who suggested that the APA “would have loved us to just flog a bunch of those SME customers for next to nothing and walk away”. This attitude appears to support similar allegations made by Oliver Morley, in his current court proceedings against RBS, that the APA were influencing RBS to prevent his efforts to refinance to another bank.

Commenting on the session, Kevin Hollinrake MP, Co-Chair of the APPG on Fair Business Banking, said: “Ten years on, it is surely now time for a full public inquiry to establish who was responsible for the disgraceful mistreatment and destruction of thousands of SMEs. The report raises some key questions that cannot be left unanswered, particularly in the context of the Morley case where there appears to be evidence of APA influence. It also provides evidence of an intentional strategy to distress the businesses in the GRG, something the FCA say they could find no evidence of.”

It also emerged in the evidence session that the Chair of the FCA, Charles Randell, who was a key figure in designing the APA in 2009, was unaware that the APA was underwriting SME loans within RBS’ GRG unit. He commented: “it was not until I saw the report that I actually realised that any small business assets were under the Asset Protection Agency because at the stage where I left the story, the scheme that had been established was largely focused at large complex to value assets in the major banks and in the case of RBS that was a very different kind of asset that was in the sights of the scheme as constructed in early 2009. It came as a surprise to me that these assets were in the scheme in the first place”

It is deeply concerning that after such a prolonged investigation, important questions regarding responsibility, culpability and external influences have not been answered. We are no closer to establishing the exact role and influence of the APA, a scheme that Mr Randell suggests may have been operating beyond its original remit. An independent inquiry is now essential to get to the truth of this appalling scandal.

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