Finance inquiry must help prevent another GRG, say small firms

Credit: Jevanto Productions

Responding to the Treasury Committee’s publication of the terms of reference for its finance inquiry, alongside the full skilled persons’ report on RBS GRG, Federation of Small businesses (FSB) National Chairman Mike Cherry, said:

“Ten years on from the crash and we’re still seeing a very low proportion of small firms accessing new finance. One reason for weak demand is undoubtedly a lack of trust in major lenders among small businesses in the wake of scandals like GRG.

“Small firms want to see the finance landscape change, with increased competition from challenger banks and non-traditional lenders. Small businesses need to know that another GRG can’t happen again. That’s something the Treasury Committee must bear mind throughout its forthcoming finance inquiry.

“It’s hard to believe that victims of GRG were left with nowhere to turn when they had their lives destroyed a decade ago. But nothing in the FCA’s regulatory framework has meaningfully changed since then. What’s more, its recommendations for giving more firms access to the Financial Ombudsman are wafer thin.

“We’ve long called for the full Promontory report on GRG to be put in the public domain and it’s good to see the Treasury Committee definitively taking action on that front.

“The FCA must not delay in finalising the second phase of its investigation into GRG. It promised the probe would conclude in the coming weeks. It now needs to deliver.”