15 Dec FSA Admits Focus on RDR Led to Failure to Properly Regulate RBS Pre-Collapse

The pre-crisis Financial Services Authority board was apparently far too devoted on issues like the development of the RDR to properly meet the challenges of supervising RBS. This is according to the regulator's own report into the reasons behind the collapse of the bank. The FSA stated in their report "Much of the attention of the FSA board in the pre-crisis period, as of senior executives, was devoted to considering a number of major legacy and current conduct issues that required focus – such as Equitable Life, the retail distribution review and treating customers fairly." Their report claimed that, despite the regula tor largely doing what was expected of it, supervision teams that were overlooking more high-risk firms were extremely under-resourced, which could have been a contributing fac tor in failing to see the collapse. The RBS supervision team, which was combined with Barclays’ supervision team in 2007, was only comprised of seven team members during RBS’s failure in October 2008, which is less than a third of its size of 23 members in June 2011. The report continues "The expectation by supervision and FSA senior management that the supervision team would be able to resource the assessment of the ABN Amro acquisition on top of its day-to-day duties exacerbated the pressure on the supervision team,’ said the report."