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FCA hits back at Govt interference claims

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The FCA has dismissed claims its independence from Government has been compromised and defends its approach to the scrapped review into banking culture.

Both the regulator and Government have come under fire following the decision to close the inquiry into bank culture in favour of dealing with firms individually.

But at a Treasury committee meeting today, FCA chairman John Griffith-Jones flatly denied claims the regulator was lent on to drop the probe.

When asked by chairman Andrew Tyrie whether independence had been compromised or if specific decisions had been called into question he said: “The answer is no to both. In general I don’t feel pressure and certainly on specific operational decisions – particulary enforcement – clearly not.”

Griffith-Jones and acting chief executive Tracey McDermott also defended the handling around the communication of the decision to close the inquiry.

In December 2014 the Davis Review criticised the response to a botched media briefing that sent insurers’ share prices tumbling.

But McDermott said the decision to drop the review was not market sensitive.

She said: “There was nothing secret about the decision to drop the review. We communicated with the banks, with our panels and with one of your colleagues [Mark Garnier MP], the Banking Standards Board, British Bankers Association, there was nothing secret about it it was simply an operational decision.”

She added: “I do not believe there is any market sensitivity that the review is being scrapped. I don’t think there’s been any market reaction. In terms of public interest, clearly because of the amount of attention to this over the last couple of weeks it would be difficult to say there was not a public interest. That’s why we will need to consider whether or not wecommunicate differently.”

McDermott stressed dropping the inquiry did not mean the regulator was changing its approach to improving banking culture.

Griffith-Jones added chief executive terms should be increased from three to five years. Former chief executive Martin Wheatley was ousted by the Chancellor at end of his term in September last year.

Griffith-Jones admitted morale was down at the regulator following Wheatley’s departure. An independent review into the FCA board published last week said staff were affected by public criticism.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Methinks they dost protest too much….

    And anyway, no regulator should be totally independent of the government. It’s because the government has allowed the FCA and all its predecessors free rein, i.e. an open licence to do whatever the hell it wants (which it clearly has), that the industry’s in such a tangle and those of lesser means are unable to access advice at a price they can afford. Next thing we know, the FCA will be trying to persuade us that the FAMR was its idea and nothing to with the Treasury.

  2. So George hasn’t just told the FCA to deal with exit fees on pensions? Sounds like interference to me folk!

  3. Yeah Right…..!!! Who does she think she’s kidding? Not Mr Wheatley I’ll bet.

  4. The fact that the FCA is facing a parliamentary debate of no confidence is in itself extraordinary.

    Yesterday’s appearance in front of the TSC was very grim. Libertatem was mentioned for its expertise. The issues the FCA faces all emanate from the same place. Its lack of accountability.

    We all have bosses. They may be our customers, shareholders, boards etc.,

    The FCA reports to no one officially but is heavily influenced by the Treasury who pretend that they have no influence and take no responsibility for their actions.

    This allows the banks to influence the Treasury who influences the FCA. This is why there is a de-facto 2 tier system

    This debate is great news. Expect FCA Chairman to resign before this debate. Libertatem was instrumental in the questioning of the FCA yesterday and will be ensuing the maximum attendance and handing out ammunition to MPs.

    I need Advisers who have good contacts with their MPs to contact me now dg@libertatem.org.uk.

    Advisers need to know that this is proof positive that well designed representation works. Libertatem is having an effect and needs advisers’ support. Stop telling me it doesn’t work – if we unite we will win a better system for our clients and ourselves

    Join us Fund us http://libertatem.org.uk/par/

  5. There are two very important words in this whole debate, Governance & Influence

    It is absolutely right the treasury should be governing the FCA, however, as we are abundantly clear the is a huge amount of influence forced on the FCA by the treasury, and there is the issue, and its wrong !

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