The Financial Conduct Authority just took a major step in trying mend the relationship between the regulators and the banks —
it is scrapping the publication of its findings in its huge review of the industry’s culture.
The FCA announced in its Business Plan 2015/16 that it would do a big probe into Britain’s banking culture after a wave of financial scandals has dogged the industry since the onset of the credit crisis. Usually with thematic reviews, the findings of inquiry are published in a report.
However, a source close to the FCA told Business Insider that the regulator has done its initial round of the inquiry but has instead decided to proceed in its inquiry by working with the banks “individually,” directly, to address”remuneration, appraisal and promotion decisions” and will not be publishing a report like it usually does.
The source said it isn’t abandoning the inquiry, just that it is doing it in a different way than what is usually assumed from a thematic review.
Late last night, the Financial Times reported the same findings.
The FCA declined to comment on information in Business Insider and the FT’s report. However a spokesperson gave us this statement:
“A focus on the culture in financial services firms remains a priority for the FCA. There is currently extensive ongoing work in this area within firms and externally. We have decided that the best way to support these efforts is to engage individually with firms to encourage their delivery of cultural change as well as supporting the other initiatives outside the FCA.”
In the regulator’s Business Plan 2015/16, the FCA chairman John Griffith-Jones said “poor culture and controls continue to concern us, notwithstanding the efforts being made by firms to improve both.”
Tracey McDermott, the acting chief executive of the Financial Conduct Authority.
A change in tact for the FCA
This change in tact for the FCA can be seen as the latest step in a line of more banker-friendly ways of investigating the industry.
Tracey McDermott, the acting chief executive of the Financial Conduct Authority, has been meeting with top bank chiefs since taking the reins from predecessor Martin Wheatley in September, according to an exclusive report by my colleague Ben Moshinsky.
He reported that she will assemble the heads of wholesale banking at the biggest lenders for a private summit scheduled to take place in mid-January.
We don’t have the agenda of the meeting but it comes amid waning political will to bash bankers. It signals the FCA is willing to listen to the people it regulates and change its combatitive stance to a more open one.
The Conservativegovernment, elected for a second term in May, has rowed back on rules that would make senior executives guilty until proven innocent in the event of a scandal, scaled back the banking tax, and removed Martin Wheatley — who was seen as an intrusive regulator — as FCA chief.
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