FSA says RBS report will show regulatory deficiency
A report on Royal Bank of Scotland will be published this year and show that regulators were “severely deficient” in how they supervised the bank, the top market regulator said.
Britain had to step in and shore up the bank during the financial crisis.
Financial Services Authority Chairman Adair Turner told the watchdog’s annual meeting the report will show why there were no grounds for a successful enforcement action against the bank.
Turner said the regulatory approach allowed banks to operate with too little capital and rely too much on short-term funding.
The FSA also devoted insufficient resources to systemically important banks and failed to focus on the core issues of prudential standards, Turner said.
“We have totally reformed the capital and liquidity regime,” Turner said.
The FSA will be scrapped next year, its powers divided between a new unit at the Bank of England and a standalone Financial Conduct Authority