The FCA would have “preferred” to abolish its approved persons regime for all firms, as opposed to just banks and investment firms, Clive Adamson has said.
Giving evidence today to the Treasury select committee, the FCA’s director of supervision said it did not agree with the Treasury’s proposals to abolish regime purely for deposit taking institutions.
Mr Adamson agreed with committee chairman Andrew Tyrie MP, who stated that the regime “was just a gateway, with no ongoing assessment”.
When asked by Mr Tyrie why the approved persons regime was unfit for banks and not others, including advisory firms, he said: “We have been improving as best we can the operation of the approved persons regime for other firms.”
When asked if it was time for the FCA to consult about other institutions, he responded: “We would have preferred the new regime to apply to all financial services firms.”
Mr Tyrie has been pushing for the inclusion of all financial services firms with a tougher senior persons regime, laid out in the Banking Reform Bill.
He later said: “Regulatory approval for those running banks now appears to include a requirement for some degree of financial expertise. It is scarcely credible that this was not already the case.
“Today’s hearing provided further evidence, if any more were needed, of the fundamental flaws that have lain at the heart of the approved persons regime and in the culture of our regulators.”
He said these flaws contributed to the appointment of a man with “no knowledge of finance and no experience of running the board of a major corporation” as the chairman of Co-op Bank in the immediate aftermath of the financial crisis.
Mr Tyrie added: “Financial services firms other than banks still operate under the discredited regime. That is a mistake and Mr Adamson agrees.
“He told us that, in the FCA’s view, the reforms being applied to banks should also apply across the rest of the financial services industry. The regulators now need to tell us how and when this will be accomplished.”
