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FCA to face MPs after ditching banking culture review

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  • 07/01/2016
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FCA to face MPs after ditching banking culture review
The Financial Conduct Authority (FCA) will be required to appear before the Treasury Select Committee (TSC) to explain why its inquiry into banking culture was abandoned, the BBC reports.

Speaking to the BBC, TSC chairman Andrew Tyrie said the regulator’s move to stop the review and instead work with individual banks on culture was ‘odd’.

Acting chief executive Tracey McDermott and chairman of the FCA John Griffith-Jones will now face questions on their decision when they stand before the committee.

The FCA’s move to halt the inquiry is one of a string of moves made by the regulator in recent weeks which has seen it accused of having ‘an ever more soft touch’ on the financial services industry.

A spokeswoman for the FCA said: “We welcome the opportunity to appear before the committee to explain and clarify our position. As we have previously said a focus on the culture in financial services firms remains a priority for the FCA.

“There is currently extensive ongoing work in this area. 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.”

Earlier this week it emerged that HSBC would no longer be subject to regulatory action over its involvement in helping clients evade UK taxation by hiding assets in its private bank in Switzerland.

While it denies involvement in the regulator’s recent decisions, the Treasury has been accused of forcing the FCA’s hand in such affairs.

The City watchdog has been without a permanent chief executive since Martin Wheatley left last summer. During an interview on Radio 4’s Today programme, Chancellor George Osborne denied that he was responsible for giving the FCA ‘a free run’ by choosing not to renew Wheatley’s contract.

However, shadow chancellor John McDonnell has repeatedly accused the Chancellor of fiddling with the FCA’s affairs.

“The Chancellor has been moving towards an ever more soft touch approach by reducing the bank levy and cutting corporation tax and selling publicly owned banks off at a loss,” he said.

“Only last week he sat by while the watchdog he set up watered down its review into the sector, only six months after he replaced the head of the FCA for issuing large fines to banks.”

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