New chief of financial watchdog pledges to boost organisation’s confidence and establish ‘clear mission’
The new civil servant in charge of Britain’s financial watchdog has revealed his plan to review the regulator’s mission in a bid to boost the organisation’s confidence and improve its governance.
Andrew Bailey, who became chief executive of the Financial Conduct Authority (FCA) earlier this month, said that one of his “most obvious” priorities was “how to establish a clear understanding of [the FCA’s] obligations to consumers and to firms.”
This, he added, was “critical to the success of the organisation.”
He also pledged to ensure effective and efficient operation of the FCA, which “has suffered in terms of confidence and morale as a result of a small number of well-known and damaging episodes,” he said, referring to incidents such as an investigation concluding that the FCA was a “dysfunctional” institution after it caused chaos in 2014 by briefing a highly sensitive story to a newspaper.
These episodes, he said, “called into question the effectiveness of governance in the FCA,” adding that a lot of work is required to strengthen governance and “embed this throughout the organisation.”
He added: “It is imperative that the FCA becomes confident of its capacity and ability to put into effect its mission.
“There is a lot to be fixed but I have never shirked from hard work.
“I will provide visible leadership for staff and will ensure that the senior executive team is effective.”
His mission review has already started and Bailey expects to publish an initial proposal by early autumn, which will go out for “intensive public consultation.”
The review, he told the Treasury select committee in written correspondence, will seek to answer an “inherently difficult question: how to balance the duty of care towards consumers, the duty of responsibility of consumers for their decisions, the role of firms and the role of the regulator.”
So far, he argued, it “has not been adequately answered.”
Establishing the mission of the FCA, he said, “is vital to enable effective public accountability.”
He added: “We have experienced, and continue to experience a crisis of financial conduct, which has had damaging consequences for the economy and society.
“Financial conduct regulation has been criticised heavily for allowing this misconduct to occur.
“Out of this experience we must establish and embed the mission of the FCA, and give it the much needed underpinning.
“This mission should also be the basis of answering a number of other very important questions which shape how the FCA operates.”
Bailey, who was previously a deputy governor at the Bank of England in charge of supervising the banking sector, replaced Martin Wheatley, who was ousted after last year’s general election, as the government started to make clear it was keen to bring to an end the post-crisis era of intrusive regulation.
Bailey’s appointment was endorsed by the Treasury select committee, which said in a report published last week that he “has the professional competence and personal independence to carry out his role as chief executive of FCA.
Meanwhile, in a report published today, the committee said there is a case for separating the FCA’s enforcement division into an independent body, based on evidence of “highly problematic” relations with other parts of the regulator in the past.
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About Winnie Agbonlahor
Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.
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