Bank chiefs believe the FSA staff tasked with challenging their risk-taking strategies are too junior for the role, according to Bank of England governor Mervyn King (pictured).
Speaking in this morning’s Treasury select committee evidence session, King said he has been told by the chief executives of the UK’s major banks that the staff sent to meet with lenders are not experienced enough.
He said: “Many of the bank chief executives that I talk to about this have themselves said that in the past, when they have had meetings with the FSA, they have met levels of staff who are, to be honest, too junior to be engaged in those conversations and do not challenge the senior management in a way they ought to be challenged. And that is one of the important changes of style which we want to bring about.”
He added this would be addressed under the new regulator.
He said: “The right response to the crisis is not to say we should have had twice as many regulators, or twice as many rules, or twice as many requirements. That is not the answer. The answer is to have the right kind of people supervising, and that is one of the things we are looking at in the Bank.”