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Banks MPs and Government

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Financial Ombudsman Service will conduct an independent review - following accusations that some consumers' claims were not decided correctly. The move follows an investigation by Channel 4's Dispatches into the service.

The programme suggested some staff with inadequate training or knowledge were making decisions on complaints. It also raised concerns that pressure to resolve cases quickly may have led to banks being wrongly favoured.

The review was announced after Nicky Morgan, who chairs the Commons Treasury Committee, wrote to Caroline Wayman, chief ombudsman and chief executive of the service. Ms Morgan said it was "troubling" that some cases may not have been decided correctly. - 23rd March 2018 - BBC Business News


A Dispatches undercover investigation at The Financial Ombudsman Service - found that staff with inadequate training or understanding of financial products are judging cases, with some having reached decisions in favour of the banks, without properly reading case files. This could mean hundreds of thousands of cases may need to be looked at again. NEARLY half a million PPI claims could have been wrongly rejected by the Financial Ombudsman Service. - 12th March 2018 at 8pm Channel 4 - Dispatches Undercover: Who’s Policing Your Bank?

Santander chief still earns £1.8m for role with toxic RBS unit, despite quitting controversial job three years ago - Santander's chief executive is being paid £1.8million a year for a job which oversaw a toxic unit at Royal Bank of Scotland – despite leaving the role four years ago. Nathan Bostock gets the seven-figure sum to compensate him for bonuses which he gave up when he jumped ship from RBS. Nathan Bostock joined RBS in 2009 as head of risk and restructuring. One part of the role was to oversee the Global Restructuring Group, which loaded struggling firms up with toxic fees. The scandal at GRG ran until 2013. The revelation will spark fury because the money relates to his time as head of risk and restructuring at RBS, a role in which he was responsible for overseeing its notorious Global Restructuring Group. He was paid £4.7million for running the bank last year according to its annual report. But the small print reveals he was also given £1.8million as a buy-out for RBS bonus awards which he lost when he was poached. It is the third such payment handed to Bostock, meaning he has picked up £5.4million from the deal so far. It is understood he will receive one more £1.8million payment this year. Because the money is being paid by Santander, it is not subject to the clawback rules which would have applied at RBS – meaning it is not possible to recover the cash should doubts emerge about Bostock’s conduct while working there. The married father of two, who lives on a farm in rural Kent, has faced questions since Cable blamed him in Parliament for failings at the GRG. A Santander spokesman said: ‘Nathan’s pay and bonus are agreed by our parent Santander Group and the Santander UK remuneration committee and board, based on performance which was evaluated as outstanding this year. The buyout is a contractual entitlement that was agreed when he was appointed to Santander UK.’ - 5th March 2018 - Mail Money

IBAS Comment: Bostock got out of RBS at a very convenient time for him and at a time when GRG’s failings were being heavily publicized. Sach left - as did Sullivan. Unfortunately, the primary instigators of the actions of the RBS/NatWest/GRG UK business plunderings are still at large (and some still not identified) but no doubt earning well. Santander, the UK arm of the Spanish finance giant, is trying to position itself as ‘the bank of choice for UK companies’. Its UK boss Nathan Bostock, paid £4.5million last year, and its head of commercial banking Chris Sullivan held key roles at RBS at a time when it was found by an official report to have plundered small firms for fees. The irony of their position and others who remained at the bank (when viewed against the many GRG victims now seeking retribution or restitution) for overseeing what was a cynical plundering by RBS GRG of UK Businesses beggars belief. Of course, Santander and RBS do have a history of closeness and connected business dealings. GRG victims have not been so lucky and now face a bank still in denial with a regulator slowing down any action to prosecute those who were responsible for GRG’s deliberate and concerted actions against UK Businesses - Eddy Weatherill – IBAS

Lloyds TSB ‘bent own auditor rules’ - Bank shifted £800,000 out of PWC accounts, court documents claim. Lloyds TSB agreed to “remove” £800,000 of fees due to be paid to PWC from its 2008 accounts in order to avoid breaching internal rules governing auditor independence, according to documents revealed in a High Court battle. The bank indicated that it would move fees due for “independent business reviews” of troubled companies conducted by PWC to a previous accounting period so that it could keep awarding the accountancy firm lucrative work without breaching a £2 million limit imposed by Lloyds’ audit committee, internal emails suggest. - 8th March 2018 - The Times

IBAS Comment: Auditor Independence or rather the alleged lack of it and auditor’s ethical conflicts are currently in the spotlight following Carillion’s spectacular failure in the construction industry and an immediate ‘fall-out’ for the many companies who lost money sub contracting to Carillion and who may well go bust themselves. However, the cases of alleged lack of auditor’s independence and unethical actions and standards (as far as any reasonable persons would think) do start to mount and the ‘smell’ of money corruption pervades the atmosphere, growing year on year - although it still appears the regulators have yet to see it, hear it, smell it, or speak and do something about it. - Eddy Weatherill - IBAS

Lloyds and PwC face £55m court case from motor dealer who says the firms forced it out of business - Yorkshire-based Premier Motor Auctions will argue Lloyds used its Business Support Unit as a profit centre to extract money from struggling firms, according to the Sunday Telegraph. Premier, led by chief executive Keith Elliott, went bust following a failed sale of the business in April 2008. The firm will allege it was the victim of a plan to push bank staff to increase profits as the financial crisis hit. - 25th February 2018 - City AM

IBAS Comment: Lloyds Business Support Unit in the news for the wrong reasons and the alleged use of RBS-NatWest-GRG tactics.

RBS makes first profit in a decade - Ross McEwan interviewed and questioned very thoroughly by Siobhan Kennedy on GRG Report - 23rd February 2018 - Channel 4 News – Siobhan Kennedy – Business Editor

IBAS Comment: RBS published their profit in the same week as the GRG Report was finally published by the Treasury Select Committee. It is obvious that the GRG Report was ‘held back' by the FCA - I cannot see any other explanation than that was to assist the bank. The GRG Report made “tough reading” for Mr McEwan. He says: "We just didn't look after them well enough" - Try, you didn’t look after them at all - that would be much more accurate. The great number of businesses thrown into chaos and destruction by RBS and NatWest using the GRG Unit is totally inexcusable. The Report now shows that RBS/GRG ‘rip off’ tactics were neither ‘turnaround’ nor TCF but an organized bank strategy which would destroy thousands of businesses (now well documented) who were ‘herded’, lied to and cruelly sent to business ‘hell’ for the bank to exploit for profit and finally destroy (in many cases) all for fat profits and bonuses (yes, they were paid bonuses as well). Some of those targeted businesses had merely complained about their business managers.

Whilst Mr McEwan may not be personally responsible for those decisions - others were formulating those decisions and coordinating a systematic financial exploitation of UK Businesses in a targeted, sustained, mass looting and asset theft. The individuals responsible for those crimes against UK Businesses should now be held fully accountable. The definition of theft is: A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it’.

It appears logical to many that the next actions against the RBS/NatWest GRG perpetrators (who thanks to the FCA have had another two years grace, whilst avoiding any responsibility) is that they face criminal prosecution/s. This debacle has a much wider value than the HBOS Reading fraud and has affected a great many more people and businesses - So, let’s see the RBS/NatWest GRG perpetrators ‘cut from the herd’ named and shamed and then properly dealt with - as until they are, this debacle will not be over. - 25th February 2018 - Eddy Weatherill - IBAS

See what RBS were saying in 2014 and also what the GRG whistleblower said - Among other revelations, the whistleblower claims:

"– GRG operatives were told to intercept payments from businesses and transfer the money instead to RBS to reduce the size of the businesses’ loans. 

– GRG had complete control over customers’ accounts and weren’t answerable to any other part of the bank.

– GRG could oversee Natwest, RBS and Coutts customers, which technically they weren’t supposed to do, but which staff did anyway."

(IBAS Comment: On the 'other revelations'' above - we would endorse all of those from our experiences of NatWest and RBS GRG 'case files')

An RBS spokesperson said: “GRG successfully turns around the vast majority of businesses it works with." - That was completely untruthful - it was a minority!

(IBAS Comment: *the facts prove that RBS comment was a further completely untruthful 'smokescreen' as the Report published by the TSC on 20th February 2018 shows)

Who presided over the RBS scandal? - FCA must find a way to bring to book those who orchestrated a systematic and endemic culture of screwing customers.

The report for the Financial Conduct Authority from the specialist agency Promontory is commendably clear that accountability should go to the top.

The failings “were not" one-off staff errors.

Rather, GRG and RBS failed “to put in place the appropriate governance and oversight procedures”.

GRG management “was aware (or should have been aware) of these issues”.

There was “an intentional and co-ordinated strategy” to focus on GRG’s commercial objectives and to place “inadequate weight” on the interests of customers.

The Promontory report doesn’t point fingers at senior individuals, since that is the FCA’s job.

The regulator, which seems to have accepted the basic veracity of the report, must now complete its “focused” investigation as speedily as possible

. - 21st February 2018 - The Guardian

IBAS Comment: At last some common sense. Well done Nicky Morgan and her committee. The TSC have seen for themselves just how disgraceful RBS/GRG conduct was purely for profits. Numerous businesses have been ripped off - their owners and directors commercially and then personally financially destroyed (whilst feeling completely impotent) and purely because of profiteering and a rogue unit's 'secret agenda' - whilst the 'regulators' (and that includes the FOS who should have seen what was going on from the NatWest/RBS cases sent to them) sat firmly on their hands - another PPI type rip off finally exposed for what it was! Now - that mess needs clearing up. - 20th February 2018

Treasury Committee publishes RBS-GRG report

20 February 2018

The Treasury Committee set the Financial Conduct Authority (FCA) the deadline of 16 February to publish the skilled persons’ report (Section 166) into RBS’ treatment of small business customers in its Global Restructuring Group (GRG).

RBS Group's treatment of SME customers referred to the Global Restructuring Group (PDF 20.67 MB)

If they were unable to meet this deadline, the Committee ordered the FCA to send the report to the Committee by the same date. The FCA did not publish the report on 16 February, so therefore sent it to the Committee.

The Committee has today agreed to publish the final, unredacted report immediately.

Chair's comments

Commenting on the publication, Mrs Morgan said:

"The findings in the report are disgraceful. The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates, and the acquisition of equity and property.

The Committee has not taken the decision to publish lightly. Normally, reports prepared under section 166 are confidential, but there is overwhelming public interest in bringing transparency to what happened at GRG, given the earlier leak of the report, and in ensuring that everyone can see, and know that they are seeing, an authentic and verified copy of Promontory’s original report.

We have today published the terms of reference for our inquiry into SME finance. We’ll examine what must change to prevent what occurred at GRG from ever happening again, and how to restore confidence among SMEs in banks as a source of finance. I encourage all those with views to submit evidence.

As well as continuing to monitor the FCA’s further investigation into GRG, we’ll keep a close eye on RBS’ Complaints Process to determine whether it is providing the fair and reasonable compensation that has been promised to mistreated customers. Any person referred to in the report is invited to make any observations to the Committee." - 20th February 2018 - TSC

MPs use parliamentary privilege to publish report on 'disgraceful' RBS unit - The Treasury Committee cites "overwhelming public interest" in releasing the full report on the bank's treatment of small firms. MPs have taken the unusual step of using parliamentary privilege to publish a regulator's full report on Royal Bank of Scotland's controversial Global Restructuring Group (GRG).The Treasury Select Committee had demanded the Financial Conduct Authority (FCA) publish, or hand over, the unredacted version by Friday last week. Only a limited summary had previously been disclosed. While the watchdog did comply, it still refused to publish the whole document it had commissioned, continuing to cite a lack of legal consents.The chair of the powerful committee, Nicky Morgan MP, confirmed on Tuesday that it had unanimously agreed to publish the document given "overwhelming" public interest.She described the findings as"disgraceful".- 20th February 2018 - Sky News

'Secret' report into RBS published - After months of wrangling, MPs have released a report by the financial regulator which said a unit of RBS mistreated thousands of small firms. The Global Restructuring Group (GRG) was marketed as an expert service that could save a business, but according to the report took "inappropriate" action. Nicky Morgan, chair of the Treasury Committee, said the findings in the report were "disgraceful". RBS said it was "deeply sorry" for its treatment of businesses in the GRG. The contents of the report were first disclosed by the BBC in August last year. The Financial Conduct Authority (FCA) had refused to publish the report, blaming legal reasons, but after a meeting, MPs on the Treasury Committee voted to publish it. Ms Morgan said MPs had not taken the decision to publish lightly, as normally such reports are confidential. However, she said there was an "overwhelming" public interest in its publication. "The findings in the report are disgraceful. The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates, and the acquisition of equity and property," she said. The GRG operated from 2005 to 2013 and at its peak handled 16,000 companies. Companies were referred to it when they skipped a loan repayment or suffered a significant drop in sales or profits.- 20th February 2018 - BBC Business News

Santander bosses engulfed in RBS scandal fallout: Pair were overseeing controversial division that plundered troubled small firms for fees. The Mail on Sunday last week revealed damning details from a suppressed report into abuses of small firms by GRG, which was supposed to help troubled businesses back to health but preyed on them instead. Two of the senior managers overseeing GRG at the time are now at Santander – where they are trying to beef up the bank’s lending to small firms.

Sach revealed in evidence to the Treasury Select Committee in 2014: ‘Mr Sullivan and others sit on what we call the Executive Committee of GRG, so there is considerable oversight of what we do within the bank.’ Sullivan has become a target for GRG victims because he told the Treasury Select Committee the division was ‘unequivocally...a cost centre’ for the bank.

But the leaked report, by independent experts at research firm Promontory, said that GRG was a profit centre. Sullivan was the executive RBS used following the crisis to push the argument it was still lending to small businesses, even as it foreclosed on thousands of them.

The Mail on Sunday last week revealed the findings of the report, which lifted the lid on RBS’s bullying and exploitation of its vulnerable customers. In one case bankers plotted to help themselves to the stock of a bankrupt shop. Another memo urged bankers to let some customers ‘hang themselves’.

The FCA could in theory decide that Bostock or Sullivan are not ‘fit and proper’ people to hold senior roles in a British bank. The Promontory report carried a foreword by its chairman, Sir Callum McCarthy, who chaired the Financial Services Authority before the crisis.

In the foreword to the full report, he backs calls for an independent Ombudsman or Tribunal for small firms in conflict with their banks, for which The Mail on Sunday has been campaigning. He said small businesses should have ‘wider access to independent dispute resolution and redress’.

The Treasury select committee will this week decide whether to publish the full report into RBS in what could prove to be another parade of its worst failings. Once that is done, the real business of finding the bankers accountable for the behaviour will begin. - 17th February 2018 - Financial Mail on Sunday

See also: RUTH SUNDERLAND: At last, after three years, the truth RBS tried to hide - but 'Maxwellisation' may hinder justice for GRG victims

City watchdog hands full report on RBS turnaround unit to MPs - MPs on the Treasury Committee will decide on Tuesday if they are to release the unredacted version using parliamentary privilege. Andrew Bailey's letter to Treasury Committee chair Nicky Morgan said: "I do want to make it clear that it is not our intention to frustrate or impede the work of the committee, quite the reverse in fact, and with that in mind we are providing the report as required.”

While he has previously pleaded the full report should not be placed in the pubic domain - at least not yet - the committee is to meet on Tuesday to decide its next move. Mrs Morgan said: "At that meeting, I will be asking members to agree to publish the final, unredacted report under parliamentary privilege as soon as possible." - 16th February 2018 - Sky News Business

IBAS Comment: Having now seen the Full Report, we understand Mr Bailey's desire to withold it (and he continued to do so).

Hopefully, the Treasury Select Committee will now release the S166 Report for everybody to digest, as there is no doubt that RBS/GRG was a rogue outfit with a profit centre - plundering UK businesses who had the audacity to even question or complain about the bank's service or fees in any way (as that 'complaint' was enough for RBS or NatWest to transfer their customer's accounts into GRG).

Mr Bailey and the FCA as Regulator for banking does not come through this debacle with any credibility, nor does the failure evidenced increase confidence in the FCA. The reverse is the case as 'common sense' and conduct issues appears to have been sadly lacking. IBAS was aware of the RBS and NatWests desire to use complaints as a 'platform for plundering' by GRG many years ago and if we were aware of it - that should also have been apparent to the FOS, had they looked deeply enough or investigated the RBS NatWest business complaints they received.

Now it's been documented by Promontory and 'signed off' by Callum McCarthy, maybe, the FCA and Government will take this matter more seriously. RBS NatWest GRG deceptions were carried on for far too long, without intervention or any actions by the regulator, despite the lack of any TCF by GRG (as has now been documented by Promontory). The FOS has not proved capable of business banking investigations (the necessity of the Tomlinson Report showed that) and the FOS further failure in this debacle may also be due to the numbers of ex bank employees who also have bank pensions with bank allegiances within the FOS 'system'. UK businesses deserve better and now require an Independent Tribunal not the FOS. - 18th February 2018 - Eddy Weatherill - IBAS


Mr Baileyʼs comments after the RBS GRG review were that it (the review) also recommended that small businesses are given more protection in their largely unregulated dealings with banks which "highlighted a gap in support for smaller businesses with genuine grievances about business banking conduct issues that could benefit from impartial assessment and quick resolution".

FCA chief executive Andrew Bailey said it was investigating the report and "focussing on whether there is any basis for further action within our powers".

He also pointed to the lack of regulation under which it (The FCA) might act and said: "Commercial lending activity is largely unregulated in the UK, and there are no 'conduct of business' rules against which to assess GRG's treatment of SME customers.

"We expect high standards from the firms we regulate, but we cannot set or enforce these high standards in areas of unregulated activity carried on by these firms.

"The FCA will make a constructive contribution if invited to do so by lawmakers but ultimately it is for Parliament to consider and approve recommendations about widening our statutory remit."

So, the Government, who effectively owns 70% of this bank and already knows the review has been delayed (repeatedly) and ʻsanitizedʼ to allow RBS to reorganise and to dilute the claims against it (whilst the customers destroyed by this bank are left to wither, wait and die) again allows this bank to continue to deceive itʼs customers and the Treasury Select Committee members, even when the bank has been caught with its ʻhands in the customers pocketsʼ (repeatedly) and many businesses have already ʻdiedʼ and also been dissolved.

See: 3 Years On RBS GRG - Where Are They Now?

Back in that sunny summer of 2014, there was some really strong live sport on for financial journalists. It was the infamous appearance, on Tuesday 17th June, of Derek Sach and Chris Sullivan at the Treasury Select Committee (TSC). (Q526 to Q656 on RBS/GRG)

Chris Sullivan helped to identify which businesses were ripe for harvest:-

It will be formed by a combination of the relationship manager who will see an event, some deterioration in business performance, a particular contract that is lost, excessive use of overdraft, excessive limits, behaviour that is generally— [interruption]

It would be very easy to blame the senior managers, but the culture is carried out by the boots on the ground. In fact, another bank, HBOS, took the decidedly cowardly option of blaming “bad apples” / “boots on the ground” on the Reading Six fiasco which resulted in criminal convictions and porridge for their staff. - P.C. Dettmann - Z Review - 9th August 2017


The Overall Business Principles 1-11 published by the FSA Handbook (as excerpt shown below) stated:

The FSA have 11 Principles which are general statements of the main regulatory obligations that apply to every authorised firm. The Principles set out in simple terms the high level standards that all firms must meet.

If your firm contravenes one or more of the Principles, it could face enforcement action, this could, for example, result in your firmʼs authorisation being removed.

It is vital that you are aware of these Principles and ensure your firm implements them and continually reviews that these standards are being maintained.

The FSA has a wide range of powers at its disposal to enforce adherence to the principles including withdrawal of approval for regulated businesses, prohibition of individuals, interventions, fines, public censures and private warnings.

FSA Principles of Business

1. Integrity - A firm must conduct its business with integrity.

2. Skill, care and diligence - A firm must conduct its business with due skill, care and diligence.

3. Management and control - A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.

4. Financial prudence - A firm must maintain adequate financial resources.

5. Market conduct - A firm must observe proper standards of market conduct.

6. Customersʼ interests - A firm must pay due regard to the interests of its customers and treat them fairly.

7. Communications with clients - A firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading.

8.Conflicts of interest - A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.

9. Customers: relationships of trust - A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgement.

10. Clientsʼ assets - A firm must arrange adequate protection for clientsʼassets when it is responsible for them.

11. Relations with regulators - A firm must deal with its regulators in an open and co-operative way and must disclose to the FSA anything relating to the firm of which the FSA would reasonably expect notice.

Treating Customers Fairly - The way forward as outlined in the FSA 26.03.09 speech

The FCA ʻtook overʼ Banking Regulation in 2012 from the FSA and the FSA Principles were then adopted by the FCA - but where is the evidence of RB STreating Customers Fairly now - where is the evidence of the Conduct result from the “more intrusive supervision on conduct issues, and a more cohesive assessment of conduct issues and risks to fair treatment of customers posed by the firm.” - with regards RBS and GRG?

Mr Bailey now reflects on: “whether there is any basis for further action within our powers” and “pointed to the lack of regulation under which it (The FCA) might act”.

Does he not consider that RBS and GRG's institutional deception and thefts from the many UK Businesses has breached the very core of the Overall Business Principles 1-11? on which the ʻFSA has a wide range of powers at its disposal to enforce adherence to the principles including withdrawal of approval for regulated businesses, prohibition of individuals, interventions, fines, public censures and private warnings.ʼ - that comment (as published by the FSA handbook) applied to the FSA at that time - surely the FCA must have a much wider remit now?

Exactly how much more evidence does Mr Bailey require to do something of any merit for UK Business to protect them from further banking abuses?

Having seen a good number of RBS cases since RBS Specialised Lending Services was replaced by GRG around 1992 - the editorial 3 Years On RBS GRG - Where Are They Now? is a fair comment on what IBAS know was ‘direct targeting’ of businesses by the RBS and where bonuses were used to encourage RBS managers to ‘drive’ businesses into GRG’s clutches. By ‘introducing’ GRG the bank knew they could immediately exploit that position and impose much higher interest rates, costs and fees and also effectively ‘take over’ the business.

This process became systemic as profits rolled in for the bank. GRG inflicted higher interest rates, costs and exorbitant fees immediately on businesses where they were ‘introduced’ and those higher charges and fees were ‘taken’ without notice, despite protestations about ‘cash flow’ being eroded. GRG actions proved in the end to be for the benefit of the bank in short term profiteering whilst many businesses were driven into insolvency.

Insolvency of the business then meant that business assets and property could be ‘taken’ cheaply by the bank to exploit the then distressed assets.

There is no doubt in our mind that Britain’s banks have made profit from distress or that the issues raised by GRG cases (along with the issues of SWAPS and PPI compensations) evidence a systematic plundering of UK business by the UK Banking Sector.

RBS misinformation and denial of information to it’s business customers has also been an ongoing and repetitive issue which IBAS has observed in case files since the launch of RBS GRG.

There is no doubt from the many case files seen over time that GRG was used (and that may well be evidenced in the full report when it is published) to ‘push ‘ vulnerable businesses ‘over the edge’ and that GRG was deliberately levying excessive fees and additional ‘fictional’ costs (which were not justified or properly documented) onto businesses whilst the customer was also repeatedly deceived by RBS and GRG staff into believing that they were going to be ‘saved’ by GRG.

The word ʻunregulatedʼ appears to be used as an excuse by Mr Bailey and the FCA to continue doing nothing for UK Businesses - when they are already aware that UK Businesses have been faced with ʻmafia typeʼ business practices and profiteering which go back to 1992 when GRG was formed and that other banks (seeing the success of GRG on increased profits for RBS) have copied and adopted the RBS GRG methods.

Wake up Mr Bailey - enough of the time wasting - act now - before the FCA gathers even more contagion from the RBS GRG deceptions - 15th February 2018 - Eddy Weatherill - IBAS


Secret emails implicate senior managers at RBS's controversial Global Restructuring Group

• Senior GRG managers were at the heart of a plan to plunder small firms for cash

• A release of emails show 'an undue focus by management on fee generation'

An official report into RBS's Global Restructuring Group found emails that put senior managers at the heart of a plan to plunder small firms for cash.

The FCA report's authors, financial research firm Promontory, said they made a decision early on in their review to look at appraisals of staff.

'This followed the release of various emails suggesting an undue focus by management on fee generation early in the relevant period,' the full unpublished report says.

An official report into RBS's Global Restructuring Group found emails that put senior managers at the heart of a plan to plunder small firms for cash.

The finding that priority was being given to squeezing fees out of customers, who they should have been helping back to financial health was included in a previous summary of the report.

But, in a highly significant omission, separate conclusions that management knew or should have known of the issue were excised from the published FCA summary.

The full Promontory dossier contains copious detail on reports produced for the GRG board.

These 'board packs' had a greater focus on financial considerations than on 'returning customers to satisfactory' – in other words, they paid more attention to making money for the bank than on saving firms. - 11th February 2018 This is Money News


'Totally immoral':Former GRG boss raked in thousands in consultancy fees since leaving taxpayerbacked RBS

• Derek Sach left RBS in 2015 and has been advising private equity firm CVC

• He was the mastermind behind GRG's handling of small and medium firms

• GRG plundered small firms for cash - an FCA investigation is ongoing

The former boss of RBS's notorious Global Restructuring Group has raked in hundreds of thousands of pounds in consultancy fees since leaving the taxpayer-backed bank.

Derek Sach left RBS in 2015 and has been advising private equity firm CVC on its investments. He books his advice fees through a personal service company – and its accounts show it now has £323,430 in cash at the bank.

Sach was the mastermind behind the bank's handling of small and medium firms within the GRG unit, from which few emerged.

A report into its activities by City regulators has found that instead of nursing firms back to health, RBS bankers focused on plundering them for fees.

The FCA had previously published only a short summary, which omits the findings that management knew or should have known about the widespread mistreatment of clients.

FCA chief Andrew Bailey said last month he would publish the report once the FCA had finished its investigation and given those criticised a chance to respond.

Its publication will turn up the heat on former bosses. Sach ran the GRG and his boss was Nathan Bostock, who now runs Santander UK.

Chris Sullivan ran the corporate banking division for much of the period concerned. He now has a similar role at Santander.

Stephen Hester was the overall head of RBS and now runs insurer RSA.

The FCA has said its investigation is almost complete and a decision on whether to take action could be announced within weeks. - 11th February 2018 This is Money News


FCA given deadline to publish RBS report - RBS's restructuring arm is accused of intentionally pushing small businesses towards failure to pick up their assets cheaply. The City watchdog has been given a deadline to publish its report into RBS's controversial Global Restructuring Group.

The Financial Conduct Authority (FCA) has been criticised for delaying the release of the report, which looks into allegations that the bank - still more than 70% taxpayer owned - mistreated small business customers. Only a summary has been published so far, although the full version has been leaked to the media and some MPs.

Treasury Select Committee chair Nicky Morgan has called on Andrew Bailey, FCA chief executive, to publish the report or send a full copy to the committee by 16 February. Mrs Morgan said: "A version of the report is in the hands of third parties, it has been selectively reported by the media, and it may enter the public domain at any time.

"The FCA has lost control over the timing or content of further public disclosures from it. "For these reasons, the committee has requested that the FCA publish the final definitive version of the report, or send it to the committee, by Friday 16 February.

Mr Bailey said publishing the report without the legal checks sets a worrying precedent and he asked MPs not to do so using their parliamentary privilege.
An interim summary of the review, published by the FCA, found 92% of potentially viable businesses that went into GRG had "experienced some inappropriate actions".

The FCA is also conducting a further investigation into RBS, which Mr Bailey described as "well advanced" and weeks away from a conclusion. - 7th February 2018 Sky News


Revealed: State-backed RBS's role in collapse of Carillion - The taxpayer-backed Royal Bank of Scotland (RBS) tightened the terms of its funding to the stricken Government contractor Carillion three days before it was forced to call in liquidators. According to Mr Cochrane's witness statement, RBS informed Carillion last Friday that it wanted the company to pre-fund supplier payments made through the bank, which meant it would need to make those payments two days earlier than cashflow forecasts had assumed.

He said this negatively impacted Carillion's liquidity by between £2m and £20m. RBS, he added, insisted that this revised arrangement "would be in place until support from [the Government] had been agreed and that the terms of this support would determine whether other uncommitted facilities with RBS would be withdrawn".

RBS is not the only lender to Carillion singled out in Mr Cochrane's witness statement.
Santander UK, another member of the committee of Carillion's biggest lenders, caused panic among the lending syndicate on 21 December by writing to the construction giant's suppliers notifying them of immediate changes to an Early Payment Facility (EPF) with the bank. "The company relied upon that EPF in order to assist it making payments to its suppliers," Mr Cochrane said. - 16th January 2018 - Sky News


Carillion was left with just £29m before going bankrupt - Carillion was in talks with the government since October as part of a desperate bid to stave off collapse, according to the chief executive. Keith Cochrane says the construction giant was left with just £29m in cash by the time it went bust on Monday.

Until the last moments, directors still believed a rescue was possible, but banks became more demanding, he said.

The details are included in a document Mr Cochrane has prepared as part of the insolvency process. - 17th January 2018 BBC Business News

Eddy Weatherill says: "2018 - New Year - New Threat to Construction and services. The collapse of Carillion will also mean the collapse of a great number of small business suppliers to Carillion in the construction and service industry sectors, as their business bankers put pressure on them to pay their company debts, created by Carillion's lack of payment and subsequent insolvency. Small businesses/SME's will now be placed under very severe bank pressure/s for payment of bank guarantees/Directors Personal Guarantees and bank mortgages".


Independent Banking Advisory Service (IBAS) - launched in 1992 as a specialist unincorporated business banking membership organization assisting bank customers with UK business banking account loan disputes and business banking debt disputes with their bank. Our analysis and investigation of business bank loans, bank accounts, banking contracts, business banking account facilities and banking debt recovery information has been instrumental in our member's success.

IBAS business banking dispute negotiating experience has a proven strategy which provides claims and defences for business bank customers. IBAS has excellent banking investigation reputation and has featured on BBC TV, BBC TV News, ITV, Meridian and Sky News and contributed to editorials and articles for the Sunday Times, Times, Daily Mail, Daily Express and Daily Mirror.

Premier Motorauctions Ltd & Anor v Pricewaterhousecoopers LLP & Anor [2016] EWHC 2610 (Ch) (24 October 2016) - HIGH COURT DENIES SECURITY FOR COSTS APPLICATION BECAUSE CLAIMANT HELD ADEQUATE ATE INSURANCE - Snowden J handed down judgment on PricewaterhouseCoopers’ application for security for costs in Premier Motor Auctions Limited v PricewaterhouseCoopers (2016) EWHC (Ch). Snowden J suggested that the independent and professional nature of insolvency practitioners, combined with their personal liability, indicates that ATE insurance arranged by them (as in importance of ATE insurance market and acknowledged that there "is a public interest in permitting ATE insurance on appropriate terms to provide access to justice for insolvent companies under the control of responsible insolvency office-holders".

Bank threats for successful SMEs and their owners/proprietors as identified in Hansard see: Hansard debate on Premier Motor Auctions at 11am . This is an 'ongoing' case for an IBAS member which has now reached the courts with a claim against both Lloyds and also PwC.

See Austin Mitchell's address from column 212WH to column 219WH which provides Keith Elliott's MP's concerns on conflicts of interest and Austin Mitchell MP also quotes IBAS opinion on our member's case.

Elliott v Lloyds TSB Bank Plc & Anor [2012] EW Misc 7 (CC) (24 April 2012) This Claim arises out of data subject access requests (“SAR”) made by Mr Elliott to the Defendants, Lloyds TSB Bank plc (“Lloyds TSB”) and Lloyds Development Capital Ltd (“LDC”), on 2 August 2010 pursuant to s.7(1) of the Data Protection Act 1998 (“the 1998 Act”). Mr Elliott alleges that the Defendants had failed to comply with his SARs and originally sought an order from the Court that they comply pursuant to s.7 (9) of the 1998 Act


A group of financiers have been jailed for their part in a £245m scam after being convicted of bribery and corruption. - The six, including a senior banker, have been sentenced to a total of 47 years and 9 months in prison. Between 2003 and 2007, finance consultant David Mills, 59, used designer watches, exotic holidays and sex parties to bribe HBOS manager Lynden Scourfield, 54, to approve inappropriate loans for struggling businesses. Mills, who was sentenced to 15 years in jail, and his colleagues were then able to charge the business owners significant consultancy fees. Many of the firms went bankrupt as a result of the loans and some of the owners lost their homes. Scourfield had been in charge of helping business customers who were facing financial difficulties during his time at HBOS, but resigned from the bank in 2007. He was sentenced to 11 years and 3 months in prison for his offences. Judge Martin Beddoe told Scourfield he had sold his soul to the devil. - Sky News 2nd February 2017

Former HBOS manager found guilty of corruption and fraud - Six people, including two former HBOS bankers, have been found guilty of bribery and fraud that cost the bank's business customers and shareholders hundreds of millions of pounds. Lynden Scourfield, a former manager with HBOS, pleaded guilty to six counts including corruption. Five other defendants, including so-called turnaround consultants, were also convicted. In exchange for bribes, Scourfield told customers to use the turnaround firm. Prosecutor Brian O'Neill QC said: "Many individuals suffered great financial loss and considerable personal trauma as a result of their callous disregard for the businesses they had established, owned or managed." A decade on, HBOS's owner Lloyds Banking Group still has not acknowledged the full scale of the fraud - or offered to compensate its victims. - 30th January 2017 - BBC Business News

Banks told on fraud: Donʼt bounce the checks - A crimewave is sweeping the UK as thieves open accounts using fake ID - and then steal your money. For 35 of the past 36 years, you were more likely to fall victim to a bag-snatcher or a burglar than to any other type of criminal. But last year that changed. For the first time, fraud and cyber crime were “the most commonly experienced offence”, official figures revealed last week. Banks and Building Societies claim they block 60% of fraud attempts, this means - worryingly - that 40% are successful. - January 22nd 2017 - Sunday Times Money.

Eddy Weatherill says: "The news stories above illustrate the very real and newer threats to bank customers in the coming years and also the laxity of any worthwhile banking controls in the period from 2007 onwards - see my comments made on 20th November 2015 (below). The issue now for those HBOS businesses who were destroyed by the frauds perpetrated on them by HBOS managers, is - can they gain financial restitution for the now proven criminal activities at HBOS from the Directors at HBOS prior to the Lloyds takeover or from Lloyds?

Independent Banking Advisory Service (IBAS) - launched in 1992 as a specialist unincorporated business banking membership organization assisting bank customers with UK business banking account loan disputes and business banking debt disputes with their bank. Our analysis and investigation of business bank loans, bank accounts, banking contracts, business banking account facilities and banking debt recovery information has been instrumental in our member's success.

IBAS is now in it's 26th year helping/guiding those with UK Business Banking disputes and Director's Personal Guarantee business debt claims - IBAS is the only UK non profit organization which provides business banking customers with specialist business banking assistance and specialist business banking guidance and also IBAS specialist business banking investigations.

IBAS business banking dispute negotiating experience and proven strategy provides claims and defences for business bank customers. IBAS has excellent banking investigation reputation and has also featured on BBC TV, BBC TV News, ITV, Meridian and Sky News and in Sunday Times, Times, Daily Mail, Daily Express and Daily Mirror editorials.

Millions of people who have basic bank accounts may be paying higher fees than necessary - While eight million people have basic accounts, around half of them are still liable to pay fees for failed payments. The Treasury figures show that 3.7 million people have accounts that do not conform to the agreement, struck between the government and the banking industry, in 2014. Of those, 3.6 million bank with Lloyds. Only 4% of those who have basic bank accounts with Lloyds have access to the cheapest banking terms, the figures show. On 'Financial distress' "These figures are shocking, but sadly not surprising," said Hannah Maundrell, editor in chief of Money.co.uk. "Swift intervention is clearly necessary if banks can't be trusted to treat their most financially vulnerable customers fairly." Royal Bank of Scotland (RBS) is the only other bank where some basic account customers have to pay fees. - BBC Business - Personal Banking - 12th December 2016

- So, the fact that Lloyds set up such accounts to 'fleece' vulnerable people (whilst not surprising IBAS either) - evidences lack of (or no) proper regulatory control - that must be corrected very quickly - let's hope that happens before Christmas! - Eddy Weatherill on 12th December 2016

Eddy Weatherill says: Having now seen the first of the RBS letters on 'Putting things Right' which are now following the bank's announcement that they would be 'creating a new complaints process overseen by retired High Court Judge, Sir William Blackburne.' It does appear that the first steps are being taken for that process. - So far, so good. But, as I've said before, the devil is in the detail. We know from the SWAPS 'reviews' that it was the 'devil in the detail' which then allowed RBS to avoid the additional losses claimed by many businesses - although they were using legal advisors (their legal advisors still did quite well from the fees) - and the fact that it was GRG 'excesses' and fees which had created many of those losses. Maybe, this 'new complaints process' will allow redress - but we have not seen a bank pay out without good evidence and reasoning and have seen many cases which have failed despite high cost legal representation. A good case with good reasoning and evidence is now vitally important for what may be the last opportunity for many businesses to gain redress. The same applies where there is a a home or property at risk and the need to make a reasonable negotiating position instead of the bank taking all they claim through their Debt Recovery Department. The 'strength' of the customer's case is even more necessary if legal representation is unaffordable (and it is very costly) or the case is just not large enough to justify ILA or in obtaining the necessary counsel's opinion to gain litigation funding to start that process to pursue the bank for their claims. IBAS has helped many gain results which otherwise would have been impossible - so don't be too proud to ask IBAS for help. - 12th December 2016

Eddy Weatherill says: Royal Bank of Scotland (RBS) has agreed a settlement with three out of five shareholder groups (after 8 years) and is forced to 'minimise further material litigation expense' which in 'bank speak' means the balance had tilted in favour of the opposition and maybe for once the litigation funders were not prepared to put more money at risk. Along with the news that RBS "remains susceptible to financial and economic stress" means this bank is weak and still at substantial risk from further litigation both here and abroad. - 5th December 2016

RBS settles shareholder lawsuits as part of £800m deal - Royal Bank of Scotland (RBS) has agreed a settlement with three out of five shareholder groups currently suing the bank for compensation. The claims relate to a £12bn fundraising drive which RBS undertook in 2008, just months before it had to be bailed out by the British taxpayer to the tune of more than £45bn.

As previously reported by Sky News, the bank has set aside £800m to pay the claims of all five shareholder groups. According to RBS, it has agreed the settlements to "minimise further material litigation expense and management distraction" and has done so without any admission of fault. - Sky News - 5th December 2016

RBS settles three claims over 2008 fund raising - Royal Bank of Scotland (RBS) has reached a deal with three of the five shareholder groups who allege they were misled over the bank's £12bn fund raising in 2008. RBS said it had reached a "full and final settlement" with the three, and would now seek to agree terms with the two remaining groups. Investors argued they were misled over RBS's health, and so bought shares just months before it was bailed out. RBS has set aside a total of £800m to settle all the claims.

Last week, stress tests run by the Bank of England found that RBS was the worst prepared of the UK's biggest lenders to cope with another financial crisis. The results forced RBS to devise plans to bolster its balance sheet by £2bn through cost cuts and shedding assets. - BBC Business News 5th December 2016

Eddy Weatherill says: Lawrence Tomlinson is correct when he says: " Today's announcement is an important first step but it appears there are more conclusions needed on these most damning elements on the bank's behaviour." I would go further and say that for Bank PR it's very good - but as usual the 'devil is in the detail' and many business customers have already been waiting for much longer than the 3 years since the Tomlinson Report was first published.

The bank has issued denial after denial - year on year - preventing the 12,000 business customers from running their own business whilst also taking many of those businesses away (by one means or another) and many small businesses have lost their personal assets due to this bank. No wonder many SME's have resorted to legal claims in joining lawyer led 'class actions'. But, at IBAS we also know that the greater number of those small businesses cannot join into such legal claims because their claims are not 6 figure plus claims.

We look forward to 'understanding' just how the RBS will 'refund complex fees paid by about 4,000 small business GRG customers between 2008 and 2013' and will be watching carefully to see whether those refunds are correct and also allow for the time involved. But, the greater issue is on the related SME losses which will need to be 'fought for' individually because the bank does not just 'give back' money to customers when they can avoid it. Our members have IBAS support and knowledge for those issues. - 8th November 2016

RBS to compensate squeezed firms - Royal Bank of Scotland (RBS) is to compensate up to 12,000 small business customers that it allegedly mistreated in the wake of the financial crisis. The bank has announced a fund of £400m for affected firms. Its Global Restructuring Group (GRG) had been accused of buying assets cheaply from failing firms it claimed to be helping. However, regulators found RBS did not "artificially engineer" the transfer of customers to GRG. Last month, RBS said it had let some small business customers down in the past but denied it had deliberately caused them to fail.

The bank will automatically refund complex fees paid by about 4,000 small business GRG customers between 2008 and 2013, and will set up a new complaints process. The process will be overseen by retired High Court judge Sir William Blackburne. Complaints will initially be dealt with by the bank, and any that are not resolved will then be considered by the third party. In the case of businesses that have gone bust but are due compensation, it will be up to administrators to decide whether to reconstitute the firm, said RBS regulatory affairs officer, Jon Pain. It may be the case that only creditors of a dissolved firm will benefit from any compensation, rather than the business owner, he said. On Tuesday, the FCA said in it's FCA Statement that it found there was no widespread practice of transferring customers to GRG for their value, or requesting cash injections when the bank had no intention of supporting the business. Small businesses that were transferred to GRG "were exhibiting clear signs of financial difficulty," the FCA said.

However, the bank did fail to support businesses "in a manner consistent with good turnaround practice", including "placing an undue focus on pricing increases and debt reduction without due consideration to the longer term viability of customers". RBS's announcement coincides with the appearance before the Treasury Select Committee of Andrew Bailey, FCA chief executive. - BBC Business News 8th November 2016

8th November 2016 FCA News page

Lawrence Tomlinson’s press release dated 8th November 2016 confirms his opinions on the FCA's Statement.

RBS sets aside £400m to repay small business customers - Royal Bank of Scotland is setting aside £400m as it repays fees to small business customers after claims of mistreatment. The lender made the announcement, confirming a Sky News report, as it said it was putting in place a new complaints process over its controversial Global Restructuring Group (GRG).
GRG was meant to help struggling business customers but it has faced allegations - denied by the bank - that it forced them into positions of financial distress in order to benefit its own position. However chief executive Ross McEwan conceded that mistakes were made during the period, with some customers going through a "traumatic and painful experience".
The latest announcement by RBS comes as the Financial Conduct Authority (FCA), the City regulator, delivers an update on its ongoing review of the former unit between 2008 and 2013.Mr McEwan said: "I am very sorry that we did not provide the level of services and understanding we should have done."We believe that now is the right time to deal with the areas where we accept some customers were let down in the past." A new complaints process will be led by retired High Court judge Sir William Blackburne. - Sky News 8th November 2016

RBS to repay more than £300m in fees to former SME customers - The state-backed bank will set aside close to £400m for repaying fees to struggling business customers, Sky News learns. Insiders said the announcement of the remediation programme was being timed to coincide with the appearance before the Treasury Select Committee of Andrew Bailey, the Financial Conduct Authority (FCA) chief executive. Mr Bailey has come under intense pressure from Andrew Tyrie, the committee‎ chairman, to publish the results of an independent probe into GRG's conduct. Ross ‎McEwan, RBS' chief executive, said last month that the bank rejected allegations that GRG had forced business customers into positions of financial distress in order to benefit its own position. - Sky News 7th November 2016

13th October 2016

1.1 In 2013, the Parliamentary Commission on Banking Standards (PCBS) recommended that banks put in place mechanisms to allow their employees to raise concerns internally (i.e. to ‘blow the whistle’). The Commission also recommended that banks assign the responsibility for overseeing the effectiveness of those arrangements to a senior person.

1.2 In October 2015, the FCA and the PRA introduced new rules requiring internal whistleblowing arrangements to be introduced by banks, building societies, credit unions and PRA-designated investment firms (collectively known as Relevant Authorised Persons, or “RAPs”), as well as insurers. (source FCA web site)

BBC Newsnight on 10th October 2016 - provided an exclusive RBS investigation and evidenced internal papers obtained from a ‘whistleblower’ regarding RBS Global Restructuring Group (GRG).

RBS destroyed customers' businesses for profit suggests leaked files

The Tomlinson Report was published on 25th November 2013 - Lawrence Tomlinson’s press release dated 10th October 2016 confirms his opinions. As IBAS provided a number of cases for the Tomlinson Report to be produced we endorse his views and urge the FCA to ‘get behind’ the information which now provides them with the ‘smoking gun’ and act on all information now available and not ‘bury’ this matter for the bank’s benefit. Many GRG customers currently face limitation issues if they just wait - hoping for some compensation following the FCA’s report and their limitation date could lapse. That means they lose the right to bring a legal claim. The bank will seize on those ‘opportunities’ to reduce the claims against them. If you are are one of those just waiting and just hoping contact IBAS now.

Mastercard facing £19bn damages claim over inflated card charges - The Company is alleged to have set unlawfully high fees for using cards in shops over a 16-year period The claim, led by former financial services ombudsman Walter Merricks – who has instructed US-based law firm Quinn Emanuel, is to be filed under the Consumer Rights Act 2015, which allows for collective damages claims. Merricks said in a statement: 'The prices of everything we all bought from 1992 to 2008 were higher than they should have been as a result of the unlawful conduct of MasterCard. There is no question that MasterCard acted illegally in the way it conducted its business, a business that affects all of us. All of us over-paid to the tune of up to £19bn during a period lasting 16 years. My aim is to get the redress to which UK consumers are entitled and to ensure that MasterCard cannot hold on to the illegal profits it made. This case should send a signal to companies that break competition laws at the expense of UK consumers that they do so at their financial peril.'

MasterCard faces £19bn collective action over card charges - Millions of Britons could collect more than £450 each in a landmark legal case against MasterCard over a £19billion rip-off. The case revolves around the charges imposed by MasterCard on retailers for processing credit and debit card payments over 16 years. These 'interchange fees' were passed on to all shoppers regardless of whether they were MasterCard customers or not in higher prices on everything from a pair of shoes to the weekly groceries. Now the UK's former Chief Financial Ombudsman, Walter Merricks, is leading a class action lawsuit to get consumers their money back. - Daily Mail 05.07.16

IBAS Comment: MasterCard is the first big corporation to be sued under new UK laws allowing US-style class actions. Quinn Emanuel Urquhart & Sullivan are issuing a £19bn claim against the financial services giant on behalf of British debit and credit card users hit with 'illegal' charges. 

This claim appears to be the biggest in UK legal history and one of the first to be filed under the Consumer Rights Act 2015, which allows 'opt-out' claims to be brought for the first time in the UK. It was previously extremely difficult to bring consumer claims against corporations in the UK as each individual would have had to 'opt-in' to the claim.

These US-style class actions require a representative which in this case is the former chief financial services ombudsman Walter Merricks. We look forward to this claim 'developing' into a payment for the benefit of all UK banking consumers who have been 'ripped off' by various bank card processing fees over a very long period of time. - 06.07.16

MPs To Quiz FCA Heads On Ditching Banks Probe - the banking review which had been part of the FCA's 2015 business plan was shelved last month. That decision sparked concern among some MPs that the watchdog was under pressure from the Government to soften its approach to banks. Andrew Tyrie, chairman of the Treasury Select Committee, said recent decisions by the FCA were giving the impression of a "weakening of resolve". Mr Tyrie said: "The FCA's decision to drop its review of bank culture does seem curious."

The FCA was set up in 2013 after its discredited predecessor, the Financial Services Authority, failed to spot the financial crisis of 2007-9 coming or take on a string of mis-selling scandals. The Treasury last year ousted the FCA's hardline chief executive Martin Wheatley and has also eased rules making top bankers more accountable from next March. The watchdog has also said recently that it will take no action against HSBC over allegations of Swiss tax avoidance and shelved a report into incentive structures for financial product sales staff. The reputation of the banking sector has been tarnished by its role in precipitating the financial crisis and scandals such as the rigging of benchmark interest rates and the foreign exchange markets – which resulted in billions of pounds of fines.

But the FCA now says that rather than a full-scale review, engaging with banks individually is a better way of improving conduct. The committee is to assess the watchdog's efforts to meet its increased responsibilities over the last few years. Mr Tyrie said: "Getting it right – securing better protection for consumers and markets while at the same time ensuring they don't make life unduly burdensome for business, from which everyone would ultimately be the loser – is a big undertaking. "The committee will want assurance from the FCA that it is up to the job." - Sky News 7th January 2016

University of Essex - Prem Sikka - professor of Accounting at The University of Essex.  Interesting material on issues of insolvency and accountancy practice - See also: Lord Sudeley's submisson to the banking commission

Bank Reform: Osborne 'Lacks Motivation' - Sir Vince Cable has accused the Chancellor and Governor of the Bank of England of "lacking motivation" to crack down on abuses in the banking sector. Sir Vince - a fierce critic of the industry while in government - told the Murnaghan programme the decision showed that lobbying by the banks had clearly worked for them and that a "blind eye" was being adopted to abuses. He added: "What's happened now is that the balance has gone. The bankers are being listened to."Their complaints are taken on board and a blind eye adopted to abuses in the system."He made his comments as George Osborne prepares to name a new chief executive of the Financial Conduct Authority (FCA) after the ousting of Martin Wheatley last summer.The FCA's decision to drop the banking culture review - in favour of working with individual banks - further suggests that a better working relationship with the banks is being sought now they have largely recovered from the financial crisis fallout.- Sky News Monday 04 January 2016

IBAS Comment: Mr Wheatley's replacement will 'show' the FCA's 'future tone' for regulation. Mr Wheatley was ousted in the summer after Mr Osborne had decided sufficient time had passed since the financial crisis to require a "new settlement" between the City and regulators. But, there is a good deal of criticism that the Chancellor is now risking sending a too lenient a message to the City, as a continuing volume of misconduct penalties have been announced by regulators. “The FCA must not take their eye off the ball”Which? executive director, Richard Lloyd said: “It’s disappointing that the regulator has decided against publishing this report on the culture of banking. Cultural change doesn’t happen overnight, so despite signs of improvement, the FCA must not take their eye off the ball and should continue to clean up the industry.” Which? response to the FCA scrapping their banking culture report - 31st December 2015

Press Release on Publication of the PRA and FCA review into the failure of HBOS on 19th November 2015

Andrew Bailey, Deputy Governor of the Bank of England, CEO of the PRA and Accountable Executive for the HBOS Review said:“The story of the failure of HBOS is important both to provide a record of an event which required a major contribution by the public purse, and because it is a story of the failure of a bank that did not undertake complicated activity or so-called racy investment banking. HBOS was at root a simple bank that nonetheless managed to create a big problem.”

Report into the FSA’s enforcement actions following the failure of HBOS By Andrew Green Q.C. (full report download)

Eddy Weatherill said: This Report has been just too long coming. Many will now trawl through the report and find interesting 'snippets'. No doubt those already in litigation, will see from the report that 'light touch regulation' just didn't work. Because, this bank and importantly all other banks at that time, were allowed by the regulators to continue with allowing very lax management to oversee inadequate and out of date systems for recording and analyzing their own financial  position. What this shows me - is that this bank lacked any real ability to manage itself properly well before it actually collapsed. So, even more worrying when Andrew Bailey says that HBOS: 'did not undertake complicated activity or so-called racy investment banking. HBOS was at root a simple bank that nonetheless managed to create a big problem.” The annexe 4 document is the signed Enforcement Referral Document (ERD) dated 26th February 2009 - this is particularly interesting to me as it evidences the complete inability of HBOS to know, chart or analyze the actual position within the HBOS Corporate Division from early 2007. The FSA described these as 'weaknesses' and these 'weaknesses' were apparently fully identified by the FSA by 17th October 2008.

On the question: Has there been actual or potential consumer loss/detriment? The answer was: 'Without the announcement of the takeover by Lloyds and extensive Government/Bank of England liquidity support, the firm was at risk of collapse with potential detriment to customers.'

On the question: 'Is there evidence of financial crime or risk of financial crime? The answer was: 'Yes. There was a potential risk of fraud and financial crime arising from poor systems and controls'.

From what we and others have seen, financial crime prospered from the bank's poor systems and controls. That's why many HBOS customer's businesses were destroyed. But, despite all the business failures only one HBOS senior employee has been properly reprimanded. - 20th November 2015

Tomlinson RBS report 'does include Ulster Bank' - There is evidence that Ulster Bank deliberately bankrupted some viable businesses to make more profit, a government adviser has said."One of the reasons I came over was I wanted to be absolutely clear that Ulster Bank was included in my report and dossier of evidence, even though they said it wasn't," he said. "I think Ulster Bank deployed exactly the same tactics that I outlined in my dossier of evidence and report." Mr Tomlinson said Ulster Bank was included in his report, commissioned by Business Secretary Vince Cable.

The Tomlinson report said there was evidence that RBS deliberately put some "good and viable" businesses into default so it could make more profit. His allegations centre on the bank's Global Restructuring Group (GRG) lending division, which specialises in handling loans seen as being more risky. His report says that putting a business into the GRG generated revenue for the bank through fees, increased profit margins and the purchase of devalued assets by their property division, West Register. "Having met 120 people last night and probably another 40 businesses today, it just reinforces exactly what I've got in my report and gives me more confidence that the Financial Conduct Authority will find major issues within GRG." On Wednesday, Sir Andrew (Large) told the Treasury Select Committee he had seen nothing to back up Mr Tomlinson's allegations. "There's an element of plausibility in the assertions that are in the Tomlinson report... but that doesn't mean to say I think those activities are actually happening. I didn't have any evidence of them," he said. - 23rd January 2014 BBC News Northern Ireland

Eddy Weatherill says: "IBAS has provided evidence of these bank tactics to regulators over many years from our case work and would endorse Mr Tomlinson's report as being factual but there is no surprise that Sir Andrew Large (who was commissioned by the bank to overview their lending policies) saw nothing, heard nothing and can therefore speak nothing to the Treasury Select Committee on RBS GRG matters. I would be much more surprised if he had! The bank is in denial at present and Sir Andrew Large was not employed by the bank to look into that specific area. However, the evidence is there for the FCA to do something about GRG and RBS deliberately distressing and destroying UK businesses purely for the bank's own profit - if the FCA have the mind to do so. That is our question - do they? and more importantly will they? Also, it is not just RBS which has pillaged business in the UK over the last few years in order to sell the business assets and make a profit for the bank out of business distress, whilst also 'cleaning up' by also claiming on the director's personal guarantees. RBS GRG will be a good start to such matters if the FCA does not renege on their duty. UK Businesses should not be forced into failure by banks when there is no need, particularly when the banks concerned are part owned by the UK Taxpayer"

Royal Bank of Scotland investigators appointed by City watchdog. Financial Conduct Authority names two outside firms to report on allegations RBS drove small businesses into administration. RBS's head of regulation, Jon Pain, said: "We welcome confirmation of the FCA's review and will support the process in every way we can. The full investigation of these issues is vital in order to protect the trust our customers place in us." RBS has already commissioned a City law firm, Clifford Chance, to review Tomlinson's allegations. Pain said any customer who is unhappy about the global restructuring group should contact Clifford Chance. - 17th January 2014 The Guardian

Eddy Weatherill says: "Have I got enough room for the comments I would like to make? No, just not enough room to say what needs to be said. But, Lawrence Tomlinson made a good start by publishing his report on RBS and GRG and what this bank has done and also their motivation for doing it. However, whilst RBS are a very good target and have manipulated businesses into defaults, they are not alone in destroying business in the UK. All banks have done it and for the same reasons - self interest, profit and greed. Nothing wrong with a good profit for a good service. But, UK businesses require much better service and much more intelligence from those who fund them. Also, Mr Pain is being somewhat devious by suggesting all those 'unhappy about the global restructuring group should contact Clifford Chance' because the bank instructed Clifford Chance ahead of the FCA investigations in an attempt to gain as much information as possible from the customers in order to defuse claims made in the Tomlinson Report. The tactics unfortunately are similar to the way in which Cruickshank's Report in 2000 was 'derailed' and lack of Government action to correct bank excesses then is part of the reason why the UK is now in the mess that we are.

'Shocking' Nature Of Banks' Transgressions. Fines totalling £90m for Britain's two state-backed lenders, Lloyds Banking Group and Royal Bank of Scotland (RBS), were modest in the context of some of the penalties handed out to banks since the crisis of 2008. The nature of the transgressions, though, was arguably as shocking as anything seen in global banking during the last five years. 12th December 2013 Sky Business News

Eddy Weatherill comments: The 'champagne bonus' and 'grand in the hand' initiatives for Bankers 'encouraged' to deliberately mislead customers to buy products which allowed the bank staff to feed off' their customer's naivety over several years continues to evidence the endemic dishonest banking culture in the UK. Even worse, that such a culture has continued despite the banking chiefs expressing 'appropriate levels of contrition' after being once again caught with 'their hands in the till'. Is it just our imagination, or are the banks ignoring the regulators when they feel like it and still encouraging staff to 'cream off' bank customers whilst publicly showing contrition? IBAS recent c omments are at Banking News and UK Comment 2014 - it's interesting to note the comments on our web site over the last few years and just how little was done then - or has been done up to the very recent past, to control banks and bankers from their own excesses and for which we are all now paying a very high price indeed. House of Commons Debate 12 November 2013 11am on Premier Motor Auctions (Hansard) Austin Mitchell MP

Review of banking for small and medium-sized businesses (SMEs) in the UK - Start date: 19 June 2013.

It's interesting to note the comments on our web site over the last few years and how little was done then - or has been done (up to the very recent past) to control banks and bankers from their own excesses and for which we are all now paying a very high price indeed. Not only is that loss in lost jobs, income and opportunity throughout the UK but also the loss of opportunity for many going forward into a long period of low growth/ low expectation for employment with high cost for fuel and energy and also services. It is also sad to note, that despite the very high cost (to the country as a whole) that there is little evidence, so far, of bank or banker's contrition, or indeed what most bank consumers want and also desperately need. That is the prosecution of those in banking who crossed the line into criminal activity - Eddy Weatherill on 06.09.13

Bank Complaints Hit Record Amid PPI Scandal - Complaints about financial firms have surged to a record high as the effects of mis-selling continue to weigh on banks. The Financial Ombudsman Service (FOS) said new complaints rose 15% to 327,035 between January and June over the previous six months, driven by a 26% increase in complaints about payment protection insurance (PPI). Complaints about Lloyds Banking Group were almost five times higher than a year earlier, at 129,293 and rose 38% on the previous six months to make the part-nationalised lender the most complained-about group. Complaints about Lloyds Banking Group were almost five times higher than a year earlier, at 129,293. Lloyds was fined £4.3m in February by the Financial Services Authority for delaying PPI compensation to 140,000 customers. Barclays was the second-most complained about group in the FOS figures, with 44,223 cases lodged with the ombudsman, up 81% on a year earlier. The banking industry has so far set aside more than £18bn to cover the cost of PPI - more than double the cost of the Olympic Games. - SKY News 3 September 2013

Eddy Weatherill comments: "Lloyds Banking Group once more 'tops the polls' for the wrong reasons. Clearly, this bank has still not been brought under control either by the Regulators (now FCA) or by it's own management team. By now (after all the poor press about Lloyds Banking Group) it's management should have determined why they 'enjoy' such poor press. One would have expected better by now. The Lloyds Banking Group must be made to perform with honesty and integrity if the UK is ever to see banking consumer trust return. At present Lloyds Banking Group appears to require a more than gentle 'nudge' from the FCA to make it 'fit for purpose' where banking and banking trust is concerned."

Vince Cable, the Business Secretary, has been handed a dossier which its author says reveal banks’ “disturbing patterns of behaviour” towards small and medium-sized businesses. Government adviser Lawrence Tomlinson, who produced the research, said he had “exposed activity which flies in the face of the Government’s growth agenda”. Activities which “impede lending” include alleged malpractice in banks’ restructuring divisions. Mr Tomlinson accused banks of loading punitive charges on struggling companies to maximise returns and bonuses and of “making directors passengers in their own businesses”. - 01 August 2013 Daily Telegraph - Eddy Weatherill comments: "IBAS investigations of business banking cases endorse Lawrence Tomlinson's expose and it has been an IBAS concern for many years that banks have forced businesses to 'dance to the bank's tune' for bank profit whilst forcing a business into failure. We have seen how the banks do that and where IBAS is involved in such a case we fight very hard to protect the business and the individuals concerned. However, we would have appreciated much more 'assistance' from the the FSA/FCA to prevent more business failures occurring. We know and the Regulators also know that business failures occur sometimes because the banks see an opportunity for extra profit to prop up the banks. It is not a 'commercial decision' but a predatory and unfair trading decision when a bank plunders a business because it has the might to do so. It reflects the ineptitude and lack of understanding by the FCA/FSA of the unequal position faced by business when confronted by bank greed. The FSA having published the Principles 1-11 then allowed the banks to ignore the basic Principles of honesty and integrity on their 'watch'. UK Businesses have been destroyed because of that failure and Lawrence Tomlinson's expose will have the proof of that."

Vince Cable warned over bank turnaround units taking 'cut throat' approach to companies - Banks’ turnaround divisions are “exploiting” ailing firms rather than helping them, a government adviser has warned Vince Cable. Lawrence Tomlinson, who was brought in to the Business Department to represent entrepreneurs’ interests, fears that banks’ restructuring divisions are taking a “cut-throat” approach to customers. Companies can be placed in a lender’s turnaround division for breaching a covenant, when they have cash flow problems or difficulties meeting debt repayments, for example. - 09 July 2013 Daily Telegraph - Eddy Weatherill comments: " The exploitation of UK businesses by banks and their Insolvency professionals has long been an IBAS concern as well as others. IBAS believed that when the FSA Principles 1-11 were published by the FSA - that it would also mean the FSA would enforce those Principles. That just didn't happen. If Regulators do not regulate and also act to enforce (and penalize using their own regulation) then it's a certainty that businesses will be destroyed because banks are predators for their own benefit and profits." Libor scandal: Bankers discussed concerns in 2008 - Bank of England Governor Sir Mervyn King and US Treasury Secretary Timothy Geithner discussed concern about Libor interest rates as early as May 2008. Mr Geithner, who headed the New York Federal Reserve at the time, called for procedures to prevent misreporting. - 13.07.12 BBC Business News

Daily Mail 04/09/2009 - Backtrack on banking: Why Lloyds needs to be smaller, by the Chancellor who gave it a £17bn bailout - Alistair Darling has been forced into a major rethink over bailed-out superbank Lloyds. The Chancellor last night suggested that he wanted to slim it down to reduce its dominance after admitting that the financial sector needs much more competition. It represents an extraordice said: 'Unfortunately we are left with a giant which has not been through the proper competition channels. 'HBOS was handed to Lloyds on a plate. 'To correct that, the Government has now got to take the merger apart again.' IBAS comment - Firm, transparent and effective regulation has always been the ansinary reversal given that Gordon Brown rode roughshod over competition rules in personally approving the merger of Lloyds and Halifax Bank of Scotland last September.

Liberal Democrat Treasury spokesman Lord Oakeshott said: 'The Government have been making the rules up as they go along in the banking crisis and now they have been found out. Gordon Brown was only too happy to do a cosy deal which ruined Lloyds, and now they suddenly appear to have changed their tune. 'They are lurching from crisis to crisis.' Eddy Weatherill, of the Independent Banking Advisory Servwer for better banking and also consumer confidence. It is also a 'given' that Government should not be able to alter regulation 'on a whim'. The failure to implement those points so far means the UK cannot recover as quickly from recession as otherwise might be the case and growth remains poor. Protecting the banking industry at any cost has been counter productive for Government and the 'bailed out' banks are well known for exploiting weakness in Government. It's good to see the Chancellor admitting to error in this matter, but we can only hope the Government will learn the lessons quickly, before any more costly mistakes are produced. - 04/09/2009

The Bank of England's Financial Stability Report is not good reading and shows the extent of the problem created by banks and poor regulation. Robert Peston BBC Business Editor provides a good outline on his blog but the numbers are staggering. A recession lasting at least 3 years is very much on the cards now. Businesses will inevitably suffer as borrowing gets tighter. Many will fail as bankers look after themselves first - yet again! - 28/10/08

The head of the Financial Services Authority has warned the City that the era of light-touch regulation is over  The FSA chairman Lord Turner said: his body would soon have "more people asking more questions" about the way the financial sector was being run. And he said the watchdog would have more room to do this because the current crisis had debunked the myth that hands-off regulation was key to competitiveness. Well it's taken a long time coming, but as we have been saying for a long time bankers cannot regulate themselves. They will inevitably be regulated in future with a somewhat 'heavier touch' - We cannot say anything but 'at last' and good, but look at what it's cost to make this happen? - 17/10/08

The government has been accused of "complacency" after it apparently ignored warnings in July about Icelandic banks facing collapse. Is your money still in Iceland? Is your local council's money still in Iceland? Also some UK charity funds are on deposit in Iceland and fear they have lost up to £120m of funds invested in failed Icelandic banks - Will the UK Government get the money back for any of these? - 10/10/08

Banks have been allowed too much 'rope' for too long. They are now 'hanging us all' with it. Light touch regulation is to blame and regulators who do not bite hard or quick enough are part of the problem. The solution is better and stronger regulation. This last six months has proved that our existing systems are not good enough. It will probably swing the other direction now, but banks only have themselves to blame for that. Unfortunately, banking consumers of all types will inevitably pay for both the bank mistakes and the correction which will follow. - Eddy Weatherill, Chief executive, the Independent Banking Advisory Service (IBAS) - 14/02/08


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