Tyrie said ‘deficiencies’ in the way the regulator communicated externally, managed crises and market-sensitive issues had been evident in its recent handling of the decision to drop an investigation into bank culture.
The FCA came under fire earlier this year after it decided to halt an industry-wide review of bank culture. It was further criticised when it emerged that the regulator had decided not to take formal action against HSBC and its part in helping clients evade tax, which was exposed last year.
During a Treasury Committee meeting in January, Tyrie said the regulator’s new chief executive, who has since been named as Andrew Bailey, would need to address the FCA’s communication strategy as a ‘high priority’.
Tyrie’s latest comments come as further copies of FCA internal audit reports have been published by the committee in a move to extend scrutiny of the regulator. Last year the regulator agreed to release a number of documents relating to its internal processes to the public.
The latest tranche of reports have ben examined by the committee since November 2014 which has now decided to make them publicly available.
Among the findings outlined in the report are:
- Existing governance arrangements over the organisation’s approach to incident response and crisis management are inadequate
- The FCA does not have a single overarching framework in place to support staff in implementing effective responses to incidents and potential crisis situations
- There is a need for better awareness among FCA staff of the risks associated with identifying, handling and managing market sensitive information
Tyrie said: “The FCA has had a difficult couple of years – the Davis review illustrated some of the regulator’s institutional weaknesses. The Committee will continue to keep a close eye on the FCA.
“The reports – produced after the FCA’s extraordinary and incompetent briefing of the press in 2013 on its plans to investigate the insurance industry – shed some light on the extent to which the FCA is improving its standards, and the overall quality of its work.”
Tyrie added: “A finding of one of these reports is that the FCA ‘lacked a coherent and co-ordinated process for responding to incidents and managing crises’. Deficiencies remain in the FCA’s handling of crisis management, external communications and market-sensitive issues. This has been evident from the FCA’s curious handling of their decision to drop an investigation into bank culture. There is clearly a great deal of work left to do.”
A spokeswoman for the FCA said: “All actions raised in the audit reports have now been completed.”
