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Martin Wheatley: ‘We have barely got started’

Financial Conduct Authority chief executive designate Martin Wheatley has continued his hardline rhetoric saying the regulator “has barely got started” on its crackdown on misconduct, as he signals a greater emphasis on individuals being held to account.

In an interview with The Independent, published today, Wheatley (pictured) told the newspaper: “We have barely got started.” He said those who believe the regulator is already too tough have a “big wake-up call coming.”

Wheatley directed most of his anger at the way banks treat their customers.

He said: “The truth is that if our supermarkets in this country, if John Lewis operated in a way that banks do, they would not have any customers.

“If companies were acting in a way that was thinking about the long-term interests of their customers then you would not need heavy-handed financial regulation.”

Wheatley described “a deep, dark period” for financial services between 2005 and 2008, from which many of today’s current scandals stem.

He said: “That was a horror period in terms of the way people were abused in their financial services. A lot of the things we are dealing with today – Libor, payment protection insurance, interest rate swaps, all of them go back to that period.”

Wheatley admitted fining firms to curb bad practice has not worked, as ultimately shareholders end up with the bill.

He said: “If there are failures in the future we want individuals held to account.” Wheatley plans to achieve this by forcing banks to assign personal responsibility for certain functions to individual bankers.

He added: “Society wants us not just to be ticking boxes, asking if people have been following the rules, but to be looking at outcomes and at what is going wrong and then taking action. That is what I have been brought in to do and that is what I will do.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. I don’t think anyone thinks the ‘Regulator’ has been or is ‘tough’ with the Banks (most of the Regulatory staff are from Banks). They do seem to be tough on the people who can’t fight back – the smaller companies.
    However once again we hear of the ‘tough’ world that Financial Services (FS) will endure from the new man shoe-horned in at the top. Actions speak louder than words – lets see what you do with the Banks first or are they still to big and chummy to go at? Why not try and do something constructive with FS instead of destructive?

  2. Christopher Lean 1st October 2012 at 9:53 am

    Since many individuals that operate IFA firms are the shareholders, then I guess that most of this is aimed at the banks. Small/medium IFA firms have to look after their clients and those that run them have to take personal responsibility when things go wrong. This statement does not change that.

    Having seen, first hand, the sales culture in banks then I feel part of this is overdue. For the financial advisers in the banks, there was a target to be hit and a no excuse policy. Hardly surprising that the guys on the ground may not have applied the principles of best practice with the sword of Damocles hanging above them for 12 months of the year.

    Of course, if there were client complaints or a flagging up of a compliance failure, the individual would be hung out to dry and no mention would be made of the pressure from above.

  3. I’ve been saying for a number of years the FSA regulated the industry the wrong way round.

    Regulate the product providers and the institutions and the regulation will filter through to the IFA sector.

    Good to see the boot is to be swung in a different direction.

  4. The things that Mr Wheatley cites ~ Libor, payment protection insurance and interest rate swaps ~ are all bank activities, aren’t they? Thus, his statement serves emphatically to confirm exactly what the IFA sector has been trying for years to get the FSA to take note of and act upon.

    Surely, shouldn’t those within the FSA who, in large measure, steadfastly ignored these calls for action against the biggest villains and instead directed a completely disproportionate level of regulatory firepower at the IFA sector be called to account for the present state of affairs?

    But that, of course, is the very core of the problem ~ lack of accountability.

  5. What’s all this about things going wrong between 2005 and 2008. The banks’ have been misselling PPI since the 90’s and the PIA did nowt.

  6. “Wheatley described “a deep, dark period” for financial services between 2005 and 2008, from which many of today’s current scandals stem.”

    “He said: “That was a horror period in terms of the way people were abused in their financial services. A lot of the things we are dealing with today – Libor, payment protection insurance, interest rate swaps, all of them go back to that period.”

    That’s right Mr Wheatley, a period when, despite ever increasing regulatory costs, huge salaries, and obscene bonuses, the Regulator was asleep on the job, and obsessed with detail, rather than the ‘big picture’ which would have helped them fulfil their role of Consumer protection.

    So who pays for all this failure? Well it’s sure as hell not the FSA management is it?

    Anyway, as Mr W. is so keen to make clear, it was nothing to do with him, Guv, honest!

  7. Time taken to borrow money via a regulated process? 10 minutes

    Time taken to invest via a regulated process – 8 hours

    One might conclude that the FCA doesn’t want people to save?

    All this talk of bank bashing is just empty rhetoric – let’s see some action. Why are the money lenders still getting away with charging 1000%+ interest, exploiting the misery of those already suffering the most?

  8. I dont think there is an IFA in th ecountry who has a problem with the regulator coming down hard, really hard on those who treat customers like dirt. I just hope he has the whit to realise that we cant be held repsonsible for every failure in the industry and use a bit of this so called “judgement based regulation” to put a bit of common sense into the system. very few if any of us are looking for a special treatment, just fair treatment and not be slammed and slated because of regulating with the benefit of hindsight. Good, proper, fair and sensible regulation is in everyones interests and those who blatently screw clients out of a fair deal should be thrown to the dogs. But base it on a bit of common sense and we will all get on like a house on fire.

  9. This is the central problem with UK regulators – they believe that tough is good. How about thinking “intelligent”, “targeted”, “appropriate”.
    If they stopped the macho stance, sat down with the industry and analysed the real problems it is quite likely they would get real results, rather more quickly and cost effectively, leaving themselves more time to deal with the hard core problems.
    Blasting everything that moves with 18in shells is not necessarily an effective strategy. Big guns may have a spectacular effect, but a nimble opponent can avoid them too often.
    Remember the motto of IBM – Think. I know that will cause a lot of headaches, but they can afford the Aspirin.

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