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FCA's Wheatley: financial firms are getting their act together

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FCA's Wheatley: financial firms are getting their act together

Martin Wheatley believes the financial world has finally sorting itself out after a testing few years.  

In speech at Mansion House scheduled for later today, the Financial Conduct Authority chief executive will say: ‘It is sobering to reflect on how far and fast the financial world has moved on over the last five years.

‘From the inside looking out, what we have now is a financial environment better able to calibrate risk and manage it. Multiple lessons have been learnt and applied. In a technical sense at least – we have moved things forward for the better.’

He will add: ‘To end, I do think the financial world is getting its act together. People want to know whether progress is uniform? Whether we can prevent all financial shocks?

‘Are the efforts of banks and financial services genuine? Are we going to get a fairer deal in the future? Will there be more set-backs? Is the regulatory system genuinely reformed? To which my answers would be: not yet, no, probably, I think so, yes, and absolutely.’

However, Wheatley (pictured) still thinks there is some way to go before the world of finance can hold its head high.

‘I also want to make the point that there is no room for complacency. Poor conduct is still a daily staple of the news – most recently in the wholesale markets. And until this flow of headlines slows, until the change is real and manifest, it will prove difficult to deliver confidence,’ he will say.

‘For me, there are two key challenges in moving things forward. Number one: to look ahead more effectively so you prevent crisis. Number two, to respond to the changing world around us with cultural reform of our own.’

He will also highlight some of the weaknesses of the regulator during the crisis, focusing on the failure to nip problems in the bud.  

‘Much of the criticism of the regulator in the past – which we are now working to untangle – has been around the frustrations of retrospective action versus early warning, talking over listening to, and inconsistency over predictability,’ Wheatley will say.

‘And this is why we now see more issues like interest only mortgages tackled by the regulator early, rather than dealt with retrospectively.

‘It also means being open and transparent on the back book of cases we are still handling. Once again, we come back to that word “fairness”. In too many cases, the first injustice is compounded by a second of failing to deal with the problem adequately.’  

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