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15 December 2010
Last updated at 14:58 ET
A row has broken out over why the Financial Services Authority (FSA) has not published a report into what went wrong at Royal Bank of Scotland (RBS).
FSA chairman Lord Turner said RBS had refused to give the regulator permission to release a study.
However, RBS disputed this, saying that it would "engage constructively to facilitate publication of the report".
The FSA ruled on 2 December that RBS had made bad decisions, but cleared it of any wrongdoing.
Lord Adair made his comments in an open letter on Wednesday to Treasury Committee chair Andrew Tyrie.
He said the FSA is only legally able to make a unilateral decision to publish the details of its investigation if enforcement action is to be taken against the culpable party. And this is not the case with RBS.
Otherwise, Lord Adair said the permission of all parties involved is required, and "RBS has made it plain that it does not wish to provide consent".
He described the situation as "extremely unsatisfactory".
In its response, an RBS spokesperson explained that the bank would help to facilitate the release of the FSA's report "when the FSA has determined the confidential material it wishes to release publicly".
Yet it added that any move on its part would be "subject to any commercial constraints".
The FSA has been widely criticised for not releasing its RBS report.
Lord Turner said the FSA now wants to produce a summary version by March, but says it still needs the bank's consent to publish even that.
Lord Turner said the limited release would not include the full information gathered during the regulator's investigation, and would not be a "detailed blow-by-blow account".
Instead the regulator wants to publish the "lessons learned", drawing on its investigation files, that would explain the failures by the FSA and by RBS management that led to the bank's rescue by the Treasury.
Business Secretary Vince Cable welcomed the announcement that the FSA now hoped to release a summary report.
He added: "Looking to the future, what this episode has demonstrated is a lack of transparency.
"It is important that where there is a legitimate public interest, reports such as these should be published subject to the necessary safeguards."
Regime change The FSA investigation followed the near-collapse of RBS, which was saved only after the government stepped in with a rescue package that has left the taxpayer owning 84% of the bank.
It accused RBS executives of poor judgment in connection with the acquisition of Dutch bank ABN Amro, which left the UK bank severely undercapitalised going into the 2008 financial crisis.
Lord Turner also said that the watchdog wants to change the rules so that reports can be made public without other parties' consent in similar cases in the future, because of the legitimate public interest involved.
"We believe we have already publicly argued that this legal regime is inappropriate in instances where a bank has been resolved or has been rescued to prevent failure [as was the case with RBS]," he said.
He noted in his written response to the MP that "a number of other enquiries are still at various stages of progress and subject to confidentiality constraints".
The FSA is currently conducting an investigation into HBOS.
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FSA chairman Lord Turner said RBS had refused to give the regulator permission to release a study.
However, RBS disputed this, saying that it would "engage constructively to facilitate publication of the report".
The FSA ruled on 2 December that RBS had made bad decisions, but cleared it of any wrongdoing.
Lord Adair made his comments in an open letter on Wednesday to Treasury Committee chair Andrew Tyrie.
He said the FSA is only legally able to make a unilateral decision to publish the details of its investigation if enforcement action is to be taken against the culpable party. And this is not the case with RBS.
Otherwise, Lord Adair said the permission of all parties involved is required, and "RBS has made it plain that it does not wish to provide consent".
He described the situation as "extremely unsatisfactory".
In its response, an RBS spokesperson explained that the bank would help to facilitate the release of the FSA's report "when the FSA has determined the confidential material it wishes to release publicly".
Yet it added that any move on its part would be "subject to any commercial constraints".
The FSA has been widely criticised for not releasing its RBS report.
Lord Turner said the FSA now wants to produce a summary version by March, but says it still needs the bank's consent to publish even that.
Lord Turner said the limited release would not include the full information gathered during the regulator's investigation, and would not be a "detailed blow-by-blow account".
Instead the regulator wants to publish the "lessons learned", drawing on its investigation files, that would explain the failures by the FSA and by RBS management that led to the bank's rescue by the Treasury.
Business Secretary Vince Cable welcomed the announcement that the FSA now hoped to release a summary report.
He added: "Looking to the future, what this episode has demonstrated is a lack of transparency.
"It is important that where there is a legitimate public interest, reports such as these should be published subject to the necessary safeguards."
Regime change The FSA investigation followed the near-collapse of RBS, which was saved only after the government stepped in with a rescue package that has left the taxpayer owning 84% of the bank.
It accused RBS executives of poor judgment in connection with the acquisition of Dutch bank ABN Amro, which left the UK bank severely undercapitalised going into the 2008 financial crisis.
Lord Turner also said that the watchdog wants to change the rules so that reports can be made public without other parties' consent in similar cases in the future, because of the legitimate public interest involved.
"We believe we have already publicly argued that this legal regime is inappropriate in instances where a bank has been resolved or has been rescued to prevent failure [as was the case with RBS]," he said.
He noted in his written response to the MP that "a number of other enquiries are still at various stages of progress and subject to confidentiality constraints".
The FSA is currently conducting an investigation into HBOS.
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