Outrage as Sir Fred Goodwin is cleared over RBS’s woes

The Financial Services Authority's investigation into RBS, now 83% owned by the taxpayer after bailouts totalling £45 billion, lasted 18 months.

It probed the conduct of senior directors over the disastrous move for Dutch bank ABN Amro in 2007, which fatally weakened the bank's balance sheet, as well as fundraising efforts in 2008 before the financial crisis struck.

But the FSA's "extensive" investigation put the bank's woes down to sheer incompetence rather than fraud, blaming a "series of bad decisions" by RBS, and will take no further action against any directors.

The FSA said: "These bad decisions were not the result of a lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the board."

"The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals."

Sir Fred, who refused to comment today, became a national hate figure after initially refusing to give up his £700,000-a-year pension after losing his job as a result of the bailout.

He later relented but is still claiming £342,500 in annual pension.

Rob MacGregor, national officer at trade union Unite, said: "Once again the FSA has demonstrated its weakness and inability to hold the sector to account. The report's conclusions are an outrage. It is unacceptable to suggest that the behaviour of the management in this iconic UK bank did not lack integrity' when they brought RBS to its knees, resulting in thousands of staff losing their livelihoods.

"By failing to bring any formal charges against the RBS executives they have allowed some of the biggest villains of the financial crisis to go on enjoying their millionaire lifestyles whilst taxpayers experience cuts and staff face a insecure future."

Shareholders campaigner Roger Lawson reacted angrily to the FSA's conclusions: "Most shareholders will take a very dim view of this. There are so many people that bought RBS shares for their own pension, and when they see these former directors walking off with huge pensions, it is totally unfair."

No former directors of the bank are with the company any longer after a clearout by chairman Sir Philip Hampton.

But the regulator, which is conducting probes into banks which collapsed during the crisis, will take the competence of former RBS directors into account if they apply for any further City roles.

The former head of RBS's investment banking business, Johnny Cameron, was spared disciplinary action by the FSA after agreeing not to perform any "significant influence function" in the City.

Fred's legacy...

"Fred the Shred" might have lost his own job after his vainglorious takeover of Dutch bank ABN Amro, but that will come as scant consolation to the roughly 30,000 other staff at the bank who have paid the price for his recklessness since successor Stephen Hester was given the gargantuan task of cleaning up the mess.

RBS posted the biggest loss in UK corporate history in 2008 when it plunged £24.1 billion into the red after a huge write-off on the ABN deal and mounting bad debts.

Hester has begun the job of unwinding the huge empire amassed by Goodwin, recently selling 318 branches to Spanish rival Santander at the behest of European competition officials.

Other disposals include its WorldPay payments business and the Churchill insurance arm is also on the block.

The Bank of England was forced to pump almost £62 billion into RBS and HBOS in emergency loans before rescue deals were agreed at the height of the crisis two years ago. The extent of the £45 billion in state hand-outs needed will leave the taxpayer with a stake in RBS for years to come.