Tracey McDermott: FCA chief defends stopping bank review

Ms McDermott said she personally stopped the review into executive reward schemes and how whistleblowers are treated, because similar work was being carried out other bodies

Tracey McDermott, the acting financial regulator, has defended her decision to halt the Financial Conduct Authority’s review into banking culture, insisting it would not have added “sufficient value” to the organisation’s ability to police the market.

The FCA remained keenly interested in the culture of UK banking and was engaging with individual banks to ensure the problems which are believed to have caused the last banking crisis are not repeated, she told MPs on the powerful parliamentary Public Accounts Committee. She said she personally stopped the review into executive reward schemes and how whistleblowers are treated, because similar work was being carried out other bodies. 

The move was widely criticised and cited as evidence of the Government’s determination to stop “banker bashing”. “We have not washed our hands of banking culture,” Ms McDermott said.

Caroline Wayman, chief financial ombudsman, told the MPs the Financial Ombudsman Service (FOS), together with the FCA had been hit with a tsunami of complaints. The National Audit Office said more than 39,000 PPI cases opened more than two years ago were still awaiting decisions. Ms Wayman said they were examining ways it could reduce the backlog of cases. “It is important that we maintain the quality of our decision-making,” she said, adding that the FOS was “not gold-plating things”.

She admitted the FOS’s relationship with the banks was “not always what it should be” but she had sufficient powers to deal with those which failed to co-operate.

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