The depressing news today is that the £45.5bn  or so that you and I (and the rest of the country) coughed up to pay for RBS cannot be blamed on anyone in particular. The regulator has admitted to a raft of mistakes regulating RBS, but seems to have slightly side-stepped taking responsibility suggesting that Mr Brown’s light touch approach, a general widespread belief about the stability of the financial system and having limited skills, experience and resources were all contributing factors. In addition, legal advice was presented that essentially says you cannot prosecute for a law that does not exist.

RBS seem guilty of being “somewhat foolish” (massive understatement) in their assessment of ABN AMRO who they took over without adequate due diligence (which comprised of two lever arch files and a CD) and was funded the purchase with debt. According to the Chairman of the FSA, this degree of due diligence is typical of contested takeovers (gulp, surely the big Accountancy firms would not be guilty of yet another Enron?). The 452 page report will probably leave most wondering how on earth many of the “glaring errors” were not picked up before. IFAs are pretty livid citing the fact that had an IFA been responsible for such systemic poor governance, they would be fined heavily and probably have their license revoked permanently. They have a point, but clearly have not even attempted to read the report but simply respond to industry media headlines, which sadly will simply provide further belief that few of them actually do any proper research before commenting.

The FSA Chairman’s forward to the report makes interesting reading and states that the “RBS executive and Board were ultimately responsible”. So there it is – the RBS Board are/were responsible for basically being pretty hopeless, these people are listed on page 342 of the report, Appendix 2H, however a word of caution, not all were in-situ during the two key “hostile” takeovers of NatWest and ABN Amro.

I believe that the FSA are to be congratulated on a thorough report, one that offers much very valuable information to any organisation – small or large. Whilst the world remains in difficult economic conditions, surely we should be learning from the recent mistakes and ensuring that they are not repeated.

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