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David Prosser: The hunt for credit crisis justice

Thursday 06 May 2010 19:00 EDT
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Outlook Slowly but surely, the Financial Services Authority is reaping its vengeance against the individuals it believes were most culpable for the UK end of the financial crisis in 2008. First there was action against several directors of Northern Rock; now the regulator looks set to ban the former Royal Bank of Scotland investment banking chief Johnny Cameron from taking roles above a certain level in financial services, at least for a while.

It is right, of course, that the regulator continues to investigate what went wrong during the crisis – and that those who were responsible are held to account. But so far, the FSA's approach seems to have been rather piecemeal.

In Mr Cameron's case, it is understood that there is no question of the FSA suggesting he has broken any laws or even its own regulations. Rather, it is the fact that he was at the helm of the RBS division that expanded so dramatically – not least with the ill-fated deal to buy ABN Amro – that gives the regulator justification for seeking its ban. In other words, it wants to punish him for having made a pig's ear of his job.

If incompetence is the charge, why has no other former banking executive faced similar action? Sir Fred Goodwin, Mr Cameron's boss at RBS, has escaped censure. So too has Andy Hornby, the former chief executive of Halifax Bank of Scotland. What about Adam Applegarth, the former boss of Northern Rock? And below those high-profile figures, there must be legions of banking executives whose risk management failures in the past might be seen as providing ample reason for preventing them from fulfilling similar roles in the future.

Many people will welcome FSA action against the likes of Mr Cameron. But he should not be singled out for punishment: plenty of other bankers are deserving of the same fate.

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