Banking culture inquiry scrapped by regulator FCA as "Osborne pulls dogs off the banks"

Labour MP John Mann told the Independent that the decision directly relates to the sacking of Martin Wheatley, former FCA chief executive

An inquiry into banking culture has been scrapped by watchdog the Financial Conduct Authority months after it was launched.

In March, the FCA said that it would conduct a review on whether banking culture was changing after a slew of financial scandals dogged the industry, including the rigging of bank lending rates and mis-sold payment protection insurance.

The review was intended to check on whether "culture change programmes" at banks were driving the right behaviour, especially on pay, bonuses and promotions in middle management, and how concerns were reported and acted on.

The FCA said it scrapped the report because a Banking Standards Board has since been set up to look at the culture within banks on an on-going, one-by-one basis.

“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," an FCA spokeman said.

Labour MP John Mann told the Independent that the decision directly relates to the sacking of Martin Wheatley, the former chief executive of the FCA, in July.

Wheatley made it clear in interviews after he stood down that he felt he had "unfinished business" and feared that the conduct of bankers might become "less of priority" as memories of the financial crisis receded.

"This relates directly to the sacking of Wheatley and the opportunity this has given Osborne to pull the dogs off the banks," Mann said.

He said that Osborne's motivation for easing off on the banks was related to HSBC's decision to look at moving its headquarters overseas, as well as the privatisation of Lloyds and RBS.

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