UK laws should be changed to allow the directors of failed banks to be automatically banned, fined and stripped of their remuneration, says a long-awaited report into the catastrophic failure of Royal Bank of Scotland three years ago.
In a 450-page report into the management and regulatory failings that brought about RBS’s collapse following its takeover of Dutch rival ABN Amro, the Financial Services Authority outlines a catalogue of management shortcomings that led to the biggest bank failure in history and calls for legal reforms to ensure there can be no repeat disasters.
The year-long probe, reading like a postmortem on the UK’s now infamous “light-touch” approach to bank regulation, also heaps a large portion of blame for RBS’s collapse on the Labour government of the day.