The Government is duty bound to make (another) attempt to restore the public’s faith in the UK banking system in the wake of the rate-rigging scandal. However, the reason for this enquiry – to investigate “transparency, conflicts of interest and the culture and professional standards of the financial services industry including the interaction with the criminal law” – troubles me.
Maintaining these standards is the job of the FSA, surely? Governing transparency, conflicts of interest, professional standards and criminal law are all basic tenets of the FSA. Regulators of any size are rarely congratulated for the good work they do, however, the FSA appears to have been remiss to not uncover the culture of lies and that has led to a scandal so soon after the UK tax payer bailout of 2008. Not even the Bank of England governor, Mervyn King, backs Mr Diamond as being ‘fit and proper’ – another FSA requirement for its approved people. Will the FSA fall under as much scrutiny as the banking sector?