A ‘racket’? Government departments and regulators are protecting elites by covering up large corporations’ failures
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The growing public awareness of this unholy alliance is leading to a rapidly increasing loss of confidence in our institutions of democracy, lower tax revenues, and cuts in healthcare, pensions, education and infrastructure spend.
Professor Prem Sikka’s latest article scathingly outlines the way in which regulatory bodies and government departments are protecting elites and corporations from retribution.
He cites seven examples, the latest being the refusal of the Financial Conduct Authority (FCA), the UK’s banking regulator, to publish its 361-page report on misconduct at the state-controlled Royal Bank of Scotland (RBS).
The 2013 Tomlinson Report showed that instead of rescuing struggling businesses, banks made money by asset-stripping and destroying them. This was followed-up an investigation by the FCA and in November 2016 it published what purported to be a summary of its full report. Subsequently, the BBC obtained a leaked version of the report. It referred to “inappropriate action” by RBS’s Global Restructuring Group (GRG).
The inappropriate action experienced by 92% of the businesses included complex loans, higher interest rates, and unnecessary fees. Businesses could not easily return to good health.
For the period 2013-2015, GRG handled 16,000 companies – and about 10% survived. Many ended up in administration and liquidation, with their assets were sold cheaply. RBS has set aside around £400 million to deal with possible claims.
The secret FCA report is not only an indictment of RBS, but also of other banks, accountants and lawyers. People are entitled to see the full scale of the scandal, and remedial legislation cannot be drafted without sight of the whole report. Yet the regulator’s impulse is to shield RBS and its accomplices.
Professor Sikka’s comment: “We can’t afford this racket” refers to the ‘knock-on effect’ as lower tax revenues (and a self-centred, heartless ideology?) lead to cuts in healthcare, pensions, education, public services and infrastructure spending.
Posted on October 30, 2017, in Banking, Banking and finance, Conflict of interest, Corporate political nexus, Cuts, Democracy undermined, Government, Manufacturing, Reward for failure, Taxation, Vested interests and tagged Financial Conduct Authority, Professor Prem Sikka, RBS, Tomlinson Report. Bookmark the permalink. Leave a comment.
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