Watchdog urged to curb mis-selling by bank branch staff
The chairman of a powerful committee of MPs has signalled he would be talking tough to the City regulator about high-street banks using pay structures in their branches that encourage bad selling by staff.
Lloyds was fined £28m last year for its aggressive bonus structure which meant workers could be demoted for not shifting enough financial products to their customers. One desperate employee resorted to selling products to himself, his wife and a colleague in order to hit his targets.
Andrew Tyrie, chairman of the Treasury Select Committee, said last night: “Incentives have been deeply misaligned for significant numbers of front-line staff, not just highly remunerated traders or the most senior executives. Deep cultural change is needed.”
Ahead of what could be a tempestuous meeting between the committee and Financial Conduct Authority chairman Martin Wheatley tomorrow, Mr Tyrie sent the watchdog a letter saying it was “now crucial” that the regulator carries out recommendations from the Banking Commission to curb sales-based incentives in high street bank branches.
“So far, the FCA has shown little enthusiasm for taking such action. Following the record fine levied against Lloyds, it should reconsider,” he said. “Unless such issues are addressed now, the risk of conduct failure at some point in the future can only increase.”
The issue highlights how far Lloyds’ chief executive, Antonio Horta-Osorio, has to go to improve the reputation of his giant retail bank. This week sees him attempt to seize the initiative with a four-pronged blitz of populist policies.
His most ambitious is to change the gender make-up of his senior tiers of management. Where currently only 28 per cent of his top 5,000 staff are women, he wants to have 40 per cent by 2020. That means reworking the group so that 600 more women are in its top ranks.
He also plans to increase from 60,000 to 80,000 the number of first-time buyers to whom it lends mortgages and increase its net lending to small and medium businesses by £1bn.
The fourth prong involves donating more to charity.
Meanwhile, he is negotiating to pay the bank’s first dividend since the financial crisis.
- 1 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 2 Perez Hilton apologises for Jennifer Lawrence naked photo leak
- 3 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 4 Mexican woman becomes world’s 'oldest person' at 127
- 5 Jennifer Lawrence 'naked sex video' will be leaked threatens 4Chan celebrity photo hacker
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
iJobs Money & Business
£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...
£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...
£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...
£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...