MPs have taken the chairman and acting chief executive of the Financial Conduct Authority to task over its independence and appointment of a new boss.
During a meeting of the Treasury select committee this morning (26 April), Labour MP for Bassetlaw John Mann said it was “extraordinary” that current Prudential Regulation Authority chief executive Andrew Bailey was given the same job at the FCA without even being interviewed for the post.
The regulator’s chairman John Griffiths-Jones responded there was no need to question him, as the four people on the decision panel “knew him well or better than the last remaining candidate”.
He explained that of a final four, acting chief executive Tracey McDermott and head of the Australian regulator Greg Medcraft were chosen, but the former dropped out and “the final person was deemed not the suitable way to go”.
“The decision to ask Andrew was taken in good faith and in my opinion, a perfectly reasonable one,” said Mr Griffiths-Jones, adding “I didn’t know which way the chancellor would go until he went”.
When asked whether the way he was appointed would damage morale within the FCA, he said: “The overwhelming feeling in the building is one of excitement and approval, he’s a formidable operator.”
Mr Mann was critical of the fact the appointment was made without any direct questions about Mr Bailey’s motivations for the job, stating he was not hired “by normal, noble means” and pointing out that this was in terms of “a controversial position, where the previous incumbent has not necessarily left of his own volition”.
The committee’s chairman opened the questioning by asking whether following the removal of previous incumbent Martin Wheatley, a parliamentary veto on future appointments granted last week has bolstered the independence of the FCA.
Mr Griffiths-Jones stated: “Our independence is paramount, so if what has been arranged brings that to life, then that must be to our benefit. I think we’re definitely perceived to be more independent, and perception is reality in our case.”
Malcolm Coury, managing director of Money Wise IFA, said his personal opinion was there needs to be far greater representation of the adviser community at the FCA when shaping policy.
“To date, it appears as if feedback from IFAs in consultations is ignored or watered down – take the FAMR as a good example of that – the concern of advice firms is that the greatest influence in shaping regulatory policy stems from high ranking people with a banking or similar background, who have never actually advised clients at the coal face.
“The advice community would welcome the opening up of the appointment of senior and influential posts within the regulator to IFAs, or recently retired advisers who may still want to make a difference.”
peter.walker@ft.com
