RUTH SUNDERLAND: Hold NatWest to account
The eagerly awaited review into the debanking scandal involving Nigel Farage and the broader issue of ‘debanking’ at Coutts, the prestigious division of NatWest, is set to be released soon to the bank’s board. This investigation, undertaken by law firm Travers Smith and commissioned by NatWest at the end of July, is unlikely to satisfy Mr. Farage or anyone else. The findings are not expected to be made public until the end of October, as the board, led by chairman Sir Howard Davies, who has himself been implicated in the controversy, requires several weeks to analyze the results.
The review aims to disclose the key findings, as well as recommendations and disciplinary actions that NatWest intends to implement, which are mandated by regulations. It will also reveal any pay and bonus clawbacks for Dame Alison Rose, who is currently receiving a £2.4m package under her contractual agreement, in addition to the Travers Smith report, in compliance with stock market rules. However, there is no obligation to disclose whether Peter Flavel, the former CEO of Coutts, who is believed to have earned between £1.5m and £2m per annum, will also face financial consequences.
All of this information will not be available until the publication of the Coutts annual report next year, which is unlikely to provide a comprehensive picture. Despite Farage’s dismissal of the Travers Smith review as a cover-up orchestrated by an establishment law firm, its scope is undeniably limited. For instance, it does not examine the tumultuous nature of Rose’s resignation, where Davies initially supported her but later reversed his position after an intervention by the Treasury. Nor does it investigate how Davies, who is stepping down in the spring, handled the entire affair.
This review is yet another disheartening example of supposedly independent investigations into the failings of our banks. Almost without exception, these inquiries consume vast amounts of time and money without holding anyone accountable. Perhaps the most egregious illustration is the investigation into the HBOS managers who were in charge during its near-collapse. The probe, which cost City regulators £7.2m, concluded last summer, 14 years after the events occurred, without taking any action.
A similar scenario unfolded with the Financial Conduct Authority’s investigation into the NatWest former unit, GRG, which was responsible for assisting struggling small and medium businesses during the 2008 crisis. Despite evidence of widespread mistreatment of customers, the FCA decided not to penalize the bank. The identities of the managers implicated were kept confidential.
These investigations are often hindered by the process of ‘Maxwellisation’, named after Robert Maxwell, which grants individuals the right to respond to criticisms. In the case of the HBOS probe, it resulted in 1425 representations from 35 people, leading to further revisions. A new trend seems to be the reluctance to disclose adverse findings against specific individuals, citing potential breaches of privacy or data protection laws.
However, this can give the impression that the system is designed to protect executives and shield firms and regulators from legal action. This mentality was evident when the Bank of England argued against naming individuals in a report on the collapse of London Capital and Finance, which criticized governor Andrew Bailey.
The taxpayers who have supported NatWest throughout numerous crises deserve better. Share or comment on this article: Some links in this article may be affiliate links. If you click on them, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products, and we do not allow any commercial relationship to affect our editorial independence.
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