The much-vaunted drive to introduce ethics into banking will come to nothing. Behaving with decency towards their customers is a totally alien concept to these organisations.
A perfect example of this is the Royal Bank of Scotland. The incompetents running this bank pitched it into insolvency. The taxpayer was forced to rescue it. How did it express its gratitude?
Easy. When dealing with a business customer, and given the choice between helping that business to flourish or pulling the rug from under it and grabbing the assets, it regularly chose the latter. It did this on an industrial scale, rapidly refilling its coffers and receiving praise from the government for doing so.
Not everyone has taken kindly to this behaviour. A businessman called Lawrence Tomlinson, objects quite strongly. He has produced a report detailing the systematic wrecking of viable enterprises by RBS.
He has been very effective in publicising his concerns, even being asked to explain his claims to the Treasury Select Committee. The resulting fuss in the media then forced RBS to commission an investigation into its dealings with business customers.
The law firm Clifford Chance was appointed to carry out this task. It did so with great diligence and absolute impartiality. At the end of the process it declared that it had found no evidence that RBS had engineered the collapse of healthy businesses.
Of course Clifford Chance didn’t actually speak to anyone from the affected businesses. It relied totally on documentary evidence. On the question of advice given, or pressure applied, it could not possibly comment.
RBS has loudly reminded us that Clifford Chance has found the bank not guilty of defrauding its customers. Just as well, as fraud is a criminal offence and would have led to hundreds of RBS employees going to prison. Mr Tomlinson had never suggested that RBS was involved in fraud. He had simply pointed out a conflict of interest. Why would the bank think that it was accused of fraud?
Once again, a customer has tried to hold a bank to account and failed. The bank has answered a complaint that wasn’t made, and ignored the one that was.
But wait. This isn’t all bad. It provides a wonderful educational opportunity for those banks that are committed to improving their ethical performance. What lessons is RBS taking from the Tomlinson affair? Is it grateful to him for bringing serious problems to light? Will the bank be changing its behaviour?
Not a bit of it. RBS is considering suing him for defamation. If it does, you can be sure that it won’t stop until he’s financially ruined. This upstart must be punished for having the temerity to criticise one of our great and noble banks.
If such a case were to go ahead, there could be some interesting revelations. The bank’s dealings with its customers would come under close scrutiny. For that reason, RBS could well change its mind. It’s currently ‘reflecting on its position’.
Perhaps it will withdraw its threat, and content itself with good old-fashioned bluff and bluster in this age of ultra-modern banking.
- RBS accuser Lawrence Tomlinson hits out at law firm Clifford Chance appointed to probe bank’s actions (independent.co.uk)
- No Evidence RBS Attempted To Defraud Customers Says Review (ibtimes.co.uk)
- Tomlinson Report (tomlinsonreport.com)
- RBS may sue over claims bank deliberately undermined SMEs (telegraph.co.uk)