The Financial Conduct Authority (FCA) said it is “normal practice” to consider legal risks when making regulatory decisions, which includes taking advice from external counsel.
“It has been suggested that we chose not to publish the report because we were afraid of legal action being taken against us,” the watchdog said in a statement released on Friday.
“It is usual practice for material risks identified in the FCA’s Governance Committees to be reflected in Board papers and discussed at Board meetings to ensure robust oversight of FCA decision making.
“We, as a regulator, would expect the same rigour and standards of risk management from the firms that we regulate.”
Details of its decision to stop short of publishing the full report came to light as part of a Freedom of Information (FOI) request.
Internal board minutes showed that the FCA believed there was an “unacceptable risk of successful legal action by current/former RBS managers” if it published the full investigation, according to The Times.
Despite calls to release the entire report, the FCA has stuck to plans to just publish a summary - the final version of which was put out at the end of November - which pointed to “significant concerns” about how small business customers were treated by the bank.
RBS has been dogged by allegations that its Global Restructuring Group intentionally pushed small businesses towards failure in the hope of picking up their assets on the cheap.
The FCA said it may take further action against the state-backed lender, but has still stopped short of offering to release the entire investigation.
“Publishing the full skilled person’s report would be unlawful without getting the necessary consents from all affected parties as the FCA would be acting in breach of statutory restrictions on the disclosure of confidential information,” the FCA reiterated on Friday.
“In addition, individuals are allowed the opportunity to see and comment on criticisms which are to be made of them in a published report,” the FCA said, noting that getting consent to publish would be a “complex and lengthy” process and potentially lead to a “heavily redacted” version.
“Likewise, we had to have regard to the possible effect of publication on our ongoing focused investigation.
“We have therefore not sought consent from the individuals or groups of individuals who are identified in the Skilled Person’s Report,” it added.