The Treasury select committee’s chairman has written to the Financial Conduct Authority’s acting chief executive requesting documents suggesting a Bank of England official oversaw its decision to cancel a banking culture review.
Andrew Tyrie wrote to Tracey McDermott today (13 January) in order to get access to papers referred to in an article by the Financial Times, which suggested Megan Butler, an executive director at the Prudential Regulation Authority, had influenced the decision to drop the FCA’s review after she was seconded in September.
As reported yesterday (13 January), an internal paper published at the end of September showed after moving across to the FCA, she helped draw up plans to abandon the culture probe, just two weeks after the City watchdog let then chief executive Martin Wheatley resign.
The FCA caused industry uproar after abandoning the review of culture at UK retail and wholesale banks just before New Year’s Eve.
The regulator’s response explained the culture in financial services firms remains a priority, but it decided the best way to support these efforts was to engage individually with firms to encourage their delivery of cultural change, as well as supporting the other initiatives outside the FCA.
“Having undertaken an initial piece of scoping work we decided a traditional thematic review would not help us achieve our desired outcomes and we would therefore take forward our work on culture through other routes.
“This was an FCA decision, HM Treasury were not involved,” added a spokesperson.
Last Friday, the select committee called on Ms McDermott and FCA chairman John Griffith-Jones to appear before it in order to explain why it dropped the review.
Mr Tyrie called the decision “curious”, especially given the review was part of the FCA’s business plan for 2015.
“It is not the dropping of the review that is crucial,” he stated. “What matters is the full implementation of the reforms recommended by the Vickers and Banking Commissions and set out to improve conduct in banks.”
peter.walker@ft.com
