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UK FSA Confirms Probes Into Major UK Bailed-Out Banks

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The U.K.'s Financial Services Authority is conducting " supervisory investigations" of the major UK banks which failed or required taxpayer support during the financial crisis, the regulator said in its annual report for 2009-2010, published Thursday.

The FSA said the investigations, which "are necessarily complex and time consuming" will help it learn lessons from the crisis but could result in penalties and disciplinary action against senior executives of these banks.

There has been widespread speculation the FSA has been investigating why the banks which required government help during the crisis got into such difficulties in the first place but this is the first public admission of such probes.

An FSA spokeswoman declined to name the banks or what the investigations are looking for.

The government holds an 83% stake in Royal Bank of Scotland Group PLC (RBS) and a 41% stake in Lloyds Banking Group PLC (LLOY.LN), having injected cash into the banks last year to shore up their capital during the financial crisis. The government also owns Northern Rock which collapsed in September 2007 and the mortgage book of Bradford & Bingley.

Lloyds' problems came largely from its acquisition of HBOS in 2008, a deal that was pushed by the U.K. government but which saddled Lloyds with loss-making investments.

The FSA said in May it had carried out an investigation into Johnny Cameron, former RBS executive director, which resulted in him agreeing not to hold a major role at a bank or regulated financial company.

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