Andrew Bailey under pressure over link to RBS scandal
Bank of England Governor Andrew Bailey is under fire after it emerged that he played a role in designing a scheme that left thousands of small businesses in ruin after the financial crisis.
Bailey was one of those who helped the Treasury design its Asset Protection Agency, which pressured lender RBS (now Natwest) to withdraw loans from customers and seize their assets.
Despite being asked about the scandal back in 2016 when being vetted for his former role as head of the Financial Conduct Authority, he did not disclose his role in helping set up the body, the Times reported.
In the aftermath of the financial crisis, RBS moved some 16,000 business customers into a new division, its so-called Global Restructuring Group.
It later emerged that over 90 per cent of those businesses had undergone some mistreatment between 2009 and 2013.
The Asset Protection Agency was closely involved with the division, and pressured staff to withdraw loans from customers.
The boss of the RBS division, Derek Sach, has previously said that the agency had no interest in protecting businesses and would have rather the bank simply sold off those assets.
Despite being ordered to investigate the scandal, Bailey’s FCA never published the result of its inquiry, which only came to light when it was leaked.
After a second investigation, it decided against taking any enforcement action against RBS. The Bank of England said that this was not Bailey’s decision.
Kevin Hollinrake, co-chairman of the all party parliamentary group on fair business banking, told the Times: “On Andrew Bailey’s watch, the FCA repeatedly avoided the opportunities to publish key evidence about the GRG scandal and failed to hold anyone to account.
“That Bailey failed to declare his interest and involvement in the agency when it featured in the FCA report as a potential cause of the scandal or to [MPs] when questioned about it is extremely disturbing.”