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Smoothing out banking irregularities has been a bumpy road Smoothing out banking irregularities has been a bumpy road
(about 1 hour later)
A £775m fund meant to counter the effects of Royal Bank of Scotland’s crisis-era bailout stumbled again this week. For a programme intended to smooth out any remaining irregularities in the banking sector a decade on from the 2008 crash, the process has been anything but.A £775m fund meant to counter the effects of Royal Bank of Scotland’s crisis-era bailout stumbled again this week. For a programme intended to smooth out any remaining irregularities in the banking sector a decade on from the 2008 crash, the process has been anything but.
The Banking Competition Remedies body, responsible for doling out millions of pounds to UK challenger banks to increase competition, announced on Wednesday it was parting ways with one of its five directors over a conflict of interest relating to an applicant of a £5m grant. BCR said Nigel Vooght’s link to the unnamed business was declared “openly” and “in good time”. The Banking Competition Remedies body, responsible for doling out millions of pounds to UK challenger banks to increase competition, announced on Wednesday it was parting ways with one of its five directors over a conflict of interest relating to an applicant for a £5m grant. BCR said Nigel Vooght’s link to the unnamed business was declared “openly” and “in good time”.
The announcement magnified the inconsistent ways in which the multimillion-pound programme and its missteps have been managed to date.The announcement magnified the inconsistent ways in which the multimillion-pound programme and its missteps have been managed to date.
Vooght’s conflict of interest is not BCR’s first, but it is the only one to prompt a resignation, or a proactive and public declaration, by its directors.Vooght’s conflict of interest is not BCR’s first, but it is the only one to prompt a resignation, or a proactive and public declaration, by its directors.
A month after handing a £100m grant to the digital upstart Starling Bank in February, it emerged Aidene Walsh, a BCR board member, had a close working history with Starling and its founder, Anne Boden. But only once the Times aired the allegations did BCR publicly acknowledge it had been aware of the conflict, saying it was appropriately managed.A month after handing a £100m grant to the digital upstart Starling Bank in February, it emerged Aidene Walsh, a BCR board member, had a close working history with Starling and its founder, Anne Boden. But only once the Times aired the allegations did BCR publicly acknowledge it had been aware of the conflict, saying it was appropriately managed.
BCR has also defended granting £120m to Metro Bank, even after the high street challenger revealed a major accounting error in January, and following subsequent investigations by City regulators. But the details of its decision were only divulged at the request of MPs on the Treasury select committee.BCR has also defended granting £120m to Metro Bank, even after the high street challenger revealed a major accounting error in January, and following subsequent investigations by City regulators. But the details of its decision were only divulged at the request of MPs on the Treasury select committee.
While the accounting mistake was raised at BCR meetings, the body was advised the blunder did not pose major concerns. It also stressed “it is not for BCR to assess the fitness or propriety” of its applicants, rather that was a role for City regulators.While the accounting mistake was raised at BCR meetings, the body was advised the blunder did not pose major concerns. It also stressed “it is not for BCR to assess the fitness or propriety” of its applicants, rather that was a role for City regulators.
Further details are hard to come by. The independent body, unlike public institutions, is not subject to freedom of information requests despite being responsible for what is arguably public cash.Further details are hard to come by. The independent body, unlike public institutions, is not subject to freedom of information requests despite being responsible for what is arguably public cash.
It is worth remembering BCR is the byproduct of the £45bn bailout of RBS at the height of the 2008 financial crisis. EU rules around state aid meant the bank had to pay a price for taking government cash. After failing to spin off a portion of its business, the Treasury and the European commission agreed the terms of an alternative remedies package to counter any skewed competition as a result of the bailout.It is worth remembering BCR is the byproduct of the £45bn bailout of RBS at the height of the 2008 financial crisis. EU rules around state aid meant the bank had to pay a price for taking government cash. After failing to spin off a portion of its business, the Treasury and the European commission agreed the terms of an alternative remedies package to counter any skewed competition as a result of the bailout.
So we may have to put our trust in Mazars, the consultancy charged with keeping tabs on the process, to help bring to light any further issues. But given BCR signalled Mazars has been satisfied with the process to date, don’t hold your breath.So we may have to put our trust in Mazars, the consultancy charged with keeping tabs on the process, to help bring to light any further issues. But given BCR signalled Mazars has been satisfied with the process to date, don’t hold your breath.
FirstGroup could leave little trace in the UKFirstGroup could leave little trace in the UK
A UK-listed plc, with its head office in Aberdeen, panning gold from school buses in North America and draining it down Britain’s railway network has clearly irked FirstGroup biggest US shareholders. But if the break-up plan announced on Thursday doesn’t go far enough to calm its American private equity investors at Coast Capital, it should set alarm bells ringing nearer home.A UK-listed plc, with its head office in Aberdeen, panning gold from school buses in North America and draining it down Britain’s railway network has clearly irked FirstGroup biggest US shareholders. But if the break-up plan announced on Thursday doesn’t go far enough to calm its American private equity investors at Coast Capital, it should set alarm bells ringing nearer home.
Should the restructuring go as planned, within a few short years, First’s only remaining toe in UK transport could be tLondon Trams – a startling vanishing act by one of the big four companies that carved up and then dominated the privatised bus and train sectors for two decades. Unions fear jobs and services may go with the sale of the bus division. Rail staff will survive the slow expiry of First’s rail division, although the ambition to see out present franchises – bar defaulting on onerous payments for South Western Railway and TransPennine Express – could draw out the agony in Aberdeen until 2025. Should the restructuring go as planned, within a few short years, First’s only remaining toe in UK transport could be London Trams – a startling vanishing act by one of the big four companies that carved up and then dominated the privatised bus and train sectors for two decades. Unions fear jobs and services may go with the sale of the bus division. Rail staff will survive the slow expiry of First’s rail division, although the ambition to see out present franchises – bar defaulting on onerous payments for South Western Railway and TransPennine Express – could draw out the agony in Aberdeen until 2025.
By leaving rail, First would of course follow in the footsteps of National Express, which is thriving in absentia since hiving off its final train franchise to some very generous Italians. And Stagecoach too looks to be departing the scene, bar some nifty legal work. The only – and only partly – home-owned company in the game is Govia, best known for its Southern and Thameslink debacles.By leaving rail, First would of course follow in the footsteps of National Express, which is thriving in absentia since hiving off its final train franchise to some very generous Italians. And Stagecoach too looks to be departing the scene, bar some nifty legal work. The only – and only partly – home-owned company in the game is Govia, best known for its Southern and Thameslink debacles.
The future of rail is being thrashed out by the Williams review, the consultation period for which ends on Friday. The fresh uncertainty sown by First’s announcement has prompted more calls for renationalisation of rail services – and indeed buses. Keith Williams has said he sees no one-size-fits-all solution, which appears to rule out nationalisation. But his review could yet be overtaken by events: who else will run the trains when the last private transport companies in Britain pull the emergency cord?The future of rail is being thrashed out by the Williams review, the consultation period for which ends on Friday. The fresh uncertainty sown by First’s announcement has prompted more calls for renationalisation of rail services – and indeed buses. Keith Williams has said he sees no one-size-fits-all solution, which appears to rule out nationalisation. But his review could yet be overtaken by events: who else will run the trains when the last private transport companies in Britain pull the emergency cord?
BankingBanking
Financial crisisFinancial crisis
Metro BankMetro Bank
Royal Bank of ScotlandRoyal Bank of Scotland
FirstGroupFirstGroup
Travel & leisureTravel & leisure
TransportTransport
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