FCA boss blasted over Clydesdale loan scandal inaction

Andrew Bailey

MP in charge of the parliamentary group on fair business banking said the head of the City watchdog, Andrew Bailey, had failed to “press the case for justice and compensation” for thousands of companies, many of which went bust.

In a scathing attack, head of the all party parliamentary group on fair business banking, Kevin Hollinrake said the watchdog’s toothlessness had meant victims’ groups were left alone to “actively highlight wrongdoing and malpractice, and press the case for justice in this and other matters, rather than the FCA”.

The complaint relates to allegations that Clydesdale mis-sold loans containing complex interest-rate swaps to small-business customers between 2001 and 2012. It is estimated that several thousand businesses took out the loans, which became vastly more expensive when interest rates fell after 2008.

It is alleged that the use of “tailored” business loans, as the products were known, devastated the lives of small-company owners unable to keep up with repayments.

The FCA has so far refused to launch an investigation into the allegations of mis-selling at Clydesdale, which at the time was owned by National Australia Bank but it has since been floated on the stock market.

The watchdog was also heavily criticised for its handling of Royal Bank of Scotland’s controversial Global Restructuring Group, which was found to have “systematically” mistreated nearly 6,000 businesses.

Conservative MP Nicky Morgan, chair of the influential treasury select committee, said the decision not to issue sanctions would be “disappointing and bewildering” to the GRG’s victims.

The FCA said it had received Mr Hollinrake’s letter relating to the Clydesdale affair and would respond directly.

Clydesdale said: “We are confident that our review of historic business lending products has been conducted in a fair and rigorous manner. We have settled the vast majority of complaints made by customers.”