How RBS dealt with small business customers


Ismail Ertürk comments on the recent report on how RBS dealt with small business customers:

The government rightly ordered an investigation into governance structure and practices at the Co-op Bank after the Flowers scandal. But the government itself failed to establish proper governance mechanism at 82% tax payer owned RBS and consequently the small business customers of RBS and the UK economy is worse off because of this.  The government still uses failed executive remuneration methods at a state-owned bank and links share price to good management.  It is not then surprising that RBS is run by its managers and executives to increase share price rather than helping economic growth.  There should be a serious investigation into the way the government has set up this dysfunctional governance mechanism at state supported and owned banks.


About Author

Ismail joined the School in January 1987, having worked previously for a merchant bank in Istanbul. Ismail is a regular commentator in the broadcast and print media. He has taught corporate finance, bank financial management and international finance on both the School’s MBA and Executive Centre programmes. His research interests are in financialisation and financial innovation.

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