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FCA defends dropped banking inquiry

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The FCA has launched a robust defence over its shelved inquiry into pay and culture at banks as claims emerge the Bank of England influenced the decision to scrap the review.

Last month, it emerged the regulator had scrapped an inquiry into banking culture and had chosen to deal with firms individually instead. FCA chairman John Griffith Jones and acting chief executive Tracey McDermott have been summoned before the Treasury committee to justify the decision.

Responding to a freedom of information request, published this week, the FCA said its 2015/16 business plan set out plans for a thematic review on “whether culture change programmes in retail and wholesale banks were driving the right behaviour”. The report was to focus on pay and promotion, and how well banks report to whistleblowers.

The regulator says after it completed the initial phase of work, it said it became clear that a report highlighting good and bad practice “would not be the best way to support and drive culture change across the sector”.

It adds it became aware the independent Banking Standards Board had begun a similar piece of work which it did not want to duplicate.

The FCA says it advised the Pratitioner and Consumer Panels it was reviewing its strategy between October and November, as well as the Banking Standard Board and the banks involved.

The Prudential Regulation Authority was informed the project would be stopped in December, as was an undisclosed MP.

Separately, the Financial Times has reported that PRA director Megan Butler was a key figure in overseeing the decision to drop the report.

Butler is understood to have been on secondment from the PRA, part of the Bank of England, and joined the FCA in September.

An FCA spokeswoman says: “As Tracey McDermott has previously said the FCA decision to not continue with the thematic review on culture was taken by her.  To suggest there has been any PRA/BoE influence on this decision is simply untrue”.

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Seems like a storm in a tea cup! Surely the other angle here is the FCA should be applauded for knowing when to say “we dont need to do this right now” – like any institution, the only have finite resource and presumably have to pick/choose their battles carefully!

  2. The FCA Bottled it!

  3. Wasn’t “highlighting good and bad practice” a central element of the FSA’s attempts to push the industry towards TCF? Has that been scrapped ~ or should I say “shelved” ~ too?

  4. So….. reading between the lines, lets us (FCA) put out a press release (FOI request) publicly before the TSC meeting for JGJ and Tracey to mimic, then drop in a secondment fall guy to take the wrap in Megan !!
    All tied up in a nice little bow

    One question….. how is a seconded person given full reign to make such (important) decisions ? or is it….. that she, (Megan) is a Treasury/PRA/BOE stooge ! which gives the FCA complete deniability on being run and used by the Treasury !!!

    Smoke and mirror regulation ……….. and they (FCA) talk about us falling below ethical standards !

  5. Its probably coincidental but whenever an organisation begins with the letter F then I tend not to believe a word, think FIFA …..dwell on the wrong doings and then move to the next, the FCA, ….feel as if the defensive statements, protestations, and lack of transparency have a similar feel.

  6. Have they also shelved their inquiry into Closed Fund Insurers?

  7. I would say that Megan Butler and Tracey McDermott were both looking at their future careers and did not want to blot the copy book for future CEO roles there seems to a merry go round between the FCA and the Banking industry for the top roles, I am sure the general public was top of their priority lists !!!

  8. Agreed Dave….what are the chances of Megan Butler and Tracey McDermott obtaining a juicy and highly paid role somewhere in the industry on a nod and a wink from Banking friends?

  9. @Grant Mitchell
    Don’t mention FIFA to much Grant. The Government will twig that Sepp is obviously going to be available and is an ideal candidate for them.

  10. Anthony Badaloo 8th May 2017 at 8:33 pm

    The Bank is never wrong. Even when they are, just bail them out. Now we see, that many bankers and their solicitors, are using a particularly nasty tactic to steal assets, on a pandemic scale, under the umbrella of the enforcement authorities. Here we see video re FCA Staff Exposed In Tax Evasion Scandal http://bit.ly/FCAEvade

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