View more on these topics

RBS chairman says directors breached duty

Leaked US embassy cables show that the Royal Bank of Scotland chairman believes former bank directors failed to live up to their duties.

Today’s Guardian reports that Sir Phillip Hampton believed directors breached their fiduciary duties.

The news comes barely a week after the Financial Services Authority cleared RBS of all wrongdoing during the financial crisis.

Sir Phillip told a visiting delegation of politicians that one of the biggest mistakes made by the bank was its takeover of Dutch bank ABN Amro just as the credit crunch began in the autumn of 2007.

On 2 December the FSA said it could not find any director who had behaved with “a lack of integrity”, nor had it found “a failure of governance on the part of the board.”

The cable reports Hampton as acknowledging that RBS had made “several enormous mistakes”.

The cable states: “Top among them was its heavy exposure in the US subprime market and the bank’s purchase of ABN Amro, which occurred at the height of the market and without RBS doing proper due diligence prior to the purchase.

“The board of directors never questioned this purchase, which Hampton termed a failure of their fiduciary responsibilities.”

The conversation, recorded in a cable sent on September 11 2009, followed a meeting between the RBS chairman, who was nine months into his new role, and Democrats Paul Kanjorski and Luis Gutierrez, and Republican Scott Garrett.

Recommended

PAUL-HOWARD.jpg

Benefit change will be testing, not fatal

Government changes to the way housing benefit is distributed will have an impact on landlords. Currently, single people under the age of 25 renting from a private landlord receive a shared room rate level of benefit. But from April 2012, the shared room rate will be extended to people under the age of 35, which […]

Gary Styles

Slow recovery needs a flexible outlook

Despite the scars of the recent past now is the time to prepare for the future, however uncertain it looks. So testing your business model against extreme scenarios will leave you in a strong position

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • Steven Balmer 14th December 2010 at 7:44 pm

    There is a problem of culture at the FSA and the banks. It seems that everyone else in finacial services is expected to negotiate change but the banks seem above the law and all reproach. The Credit Crunch has caused much hardship for very many people and some good should come out of this. A full public enquiry is the best method of ensuring this. Transparancy Mr Sants, practice what you preach. It is pointless of gvernment trying to hide behind no intervention as it is obvious the treasury is happy to do so when it suits.

  • Patrick Bamford 14th December 2010 at 5:46 pm

    The only way that anything will change is if we all lobby for a full enquiry into the failure of RBS,Lloyds TSB and Northern Rock. They were supported by billions of taxpayers money and its only fair that a full enquiry reveals why. The regulator has proven to be untouchable and by having an enquiry we can determine what went wrong from all sides.
    We must get a campaign going and demand this enquiry. It is only right that investigations take place for Wars and terrorist acts and one must take place for the unprecedented amount of tax payers money that bailed these Banks out.

  • Patrick Bamford 14th December 2010 at 5:43 pm

    The only way that anything will change is if we all lobby for a full enquiry into the failure of RBS,Lloyds TSB and Northern Rock. They were supported by billions of taxpayers money and its only fair that a full enquiry reveals why. The regulator has proven to be untouchable and by having an enquiry we can determine what went wrong from all sides.
    We must get a campaign going and demand this enquiry. It is only right that investigations take place for Wars and terrorist acts and one must take place for the unprecedented amount of tax payers money that bailed these Banks out.

  • Lee Chester 14th December 2010 at 10:52 am

    And the FSA found no wrong doing?

    What a waste of time and money our regulators are.

    Isn’t it incredible that the FSA bans IFAs and mortgage brokers all the time yet none of the banks feel the wrath. Is this to do with the levies the banks pay to the FSA that fund the end of year bonuses and xmas parties?

    Someone has got to do something about this useless organisation? I am lobbying my MP, are you?