Financial Inclusion Centre director Mick McAteer argues institutional investors escaped scrutiny over their lack of due diligence in the run-up to the financial crisis.
Speaking at the Lansons Communications Future of Financial Services conference, McAteer said: “Institutional investors have escaped any real scrutiny for their part in the financial crisis. They failed to exercise sufficient due diligence and duties of care over the funds and the money they were managing on behalf of other people.”
McAteer said it is a common theme in other consumer sectors that institutional investors are too focused on profits without understanding the risks associated with the products and services being sold.
He said: “The same pattern of behaviour happened in the financial crisis. There is a lot of blame for the banks themselves, and for the failure of regulation, but the one group of people that has escaped accountability is the institutional investors.”
Hudson Green & Associates principal Ian Hudson says: “Rather than going on a witch hunt, we need to concentrate on making sure the regulatory environment is fit for purpose.”