No fraud by Goodwin and RBS concludes FSA

2nd Dec 2010 10:50

Sir Fred Goodwin and other former senior executives of Royal Bank of Scotland made 'bad decisions' but did not act fraudulently prior to its near-collapse, an 18-month investigation by the Financial Services Authority has concluded.RBS needed a £45bn taxpayer-funded bail-out to survive the credit crunch, but the FSA says that while Goodwin and the rest of the bank's management made a bad choice in buying ABN Amro for €70bn in 2007, they did nothing that would warrant the regulator taking action.The FSA did, however, warn that the behaviour and judgement of the directors involved could impact their ability to find senior financial services industry jobs in the future."The competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms," said the regulator.In a statement, the FSA said: "The review confirmed that RBS made a series of bad decisions in the years immediately before the financial crisis, most significantly the acquisition of ABN AMRO and the decision to aggressively expand its investment banking business."However, the review concluded that these bad decisions were not the result of a lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the board."The FSA added that the investigation, which was carried out with accountancy firm PWC, had looked specifically at the conduct of senior individuals.In May, Johnny Cameron, the former chairman of RBS's investment banking unit, agreed not to "undertake any further full-time employment in the financial services industry".RBS remains 84%-owned by the British taxpayer.