View the article online at http://citywire.co.uk/money/article/a871524
FCA bottles bank battle but Tyrie stays silent
City regulator halts inquiries into banks and HSBC but Andrew Tyrie, outspoken Treasury Select Committee chair, says nothing.
The Financial Conduct Authority (FCA) has started the New Year not with a bang but a whimper.
The regulator has dropped a review into banking culture and ended its investigation into allegations that HSBC’s Swiss private bank helped wealthy clients evade tax by deciding against further action.
The two shelved reviews add to a decision made by the regulator in October to not publish a thematic review into inducements and conflicts of interests in the retail investment advice market, instead incorporating its findings into its proposals as part of the EU’s Markets in Financial Instruments Directive (Mifid) II.
The timing of the FCA’s decisions adds to the controversy as the news leaked out over the Christmas period, while everyone was more busy with wrapping rather than regulation.
The plot thickened further as it emerged that acting chief executive Tracey McDermott is the frontrunner to get the FCA's top job on a permanent basis.
Conspiracy theorists leapt to the conclusion that she has done what she can to please the Treasury by dropping the reviews after George Osborne pushed out her predecessor Martin Wheatley by failing to renew his contract, ostensibly because of his tough stance on banks.
Dropping the banking culture review in particular – apparently a decision personally authorised by McDermott – seems at odds not only with her strong previous stance as director of supervision and authorisations, but also with recent comments she made cautioning against an ‘infinite cycle’ of de-regulating too much in a benign economic environment leading to old problems resurfacing.
She was the one regulator to emerge with anything resembling credit from the HBOS report, as she pushed for the regulator to look at the wider bank rather than just one division. This attitude jars with the more recent news.
The FCA said that it would continue its work on banking culture through its supervisory team, but the decision not to publish a formal review has been met with criticism.
Treasury Select Committee (TSC) member and MP Mark Garnier told Citywire: ‘I’m certainly disappointed. The thematic review would have provided a good broad base everybody could have used for best practice across banks.
'By publishing a thematic review people like the TSC, the British Bankers’ Association and the Banking Standards Board get an opportunity to scrutinise how progress is being made in terms of culture. The FCA missed that opportunity,' he said.
‘It’s really important because ultimately you are trying to win back trust. By having a report saying how banks are working at it then you end up with consumer confidence being returned,' added Garnier.
Interesting however, is the absence of a comment from the ever-vocal TSC chair Andrew Tyrie on the FCA’s recent approach. He declined to comment on the banking culture review or lack of action against HSBC, in stark contrast to his usual willingness to make his case on a wide range of financial news stories not long after they break.
Let’s hope his silence does not last too long.
News sponsored by:
Making the most out of Europe’s potential means seeing things differently. Learn more about how BlackRock’s focused approach to investing in Europe helps investors unlock the continent’s vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
What others are saying
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.