Top bankers have complained that the City watchdog is over-using its powers to force managers to take responsibility for improvements it wants financial firms to make.
The Financial Conduct Authority’s (FCA) practitioner panel – made up of senior figures from the the financial-services industry – says it is “concerned” at the increasing use of the power known as an “attestation”.
It requires a named individual to take responsibility for implementing changes or overseeing the requirements of regulators.
They can be used to force bankers to take responsibility for everything from improving sales practices to ensuring pay policies meet the rules. Their use has grown amid a regulatory crackdown in the wake of a growing list of scandals that have shaken the industry.
But in a letter to the FCA, Graham Beale, the Nationwide Building Society chief executive who chairs the practitioner panel, said he and his colleagues had “misgivings about the reliance on senior managers attesting that they will take action, as well as the governing and monitoring arrangements around this”.
He said attestations were “in danger of skewing prioritisation of risk at firms” and called for a “clear statement” on ways in which they will be used.
Bankers have increasingly claimed the get-tough stance adopted by watchdogs both in the UK and abroad make bankers fearful of taking risks.
However, Clive Adamson, of the FCA, described the attestations as “an important supervisory tool” in his reply.
“The aim of an attestation is to ensure that there is clear accountability and senior management focus on those specific issues where we would like to see change within firms,” he wrote.