Bailey reveals FCA shunned in Brexit talks

Bailey reveals FCA shunned in Brexit talks

Andrew Bailey has revealed that the Financial Conduct Authority has been excluded from Brexit discussions in Europe.

The head of the UK financial watchdog said it had been shut out from certain discussions at its counterpart on the continent, the European Securities and Markets Authority.

Mr Bailey said the UK regulator had been excluded from talks on topics such as the future relationship between the UK and EU and what Esma expects of UK firms looking to operate on the continent.

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He told FTAdviser's sister paper the Financial Times: "There are times when they want to discuss Brexit without us being present and there are issues they want to discuss amongst themselves, so we have a bit of shuttling in and then shuttling out."

ESMA confirmed that the UK had been shut out of some talks, but made no further comment.

It is reported that the Bank of England’s Prudential Regulation Authority has had a similar experience with the European Banking Authority.

Mr Bailey took the helm at the UK regulator last year after Martin Wheatley was dismissed in 2015.

His biggest task at the regulator currently is to work with the government to duplicate existing EU rules onto the UK statute books – a project the organisation has had to take on 15 additional lawyers to achieve.

He said: ‘The European parliament takes a bigger scrutinising role… and that’s not what the Westminster parliament is particularly in the business of doing.

"It has come back a bit recently with things like ring-fencing and the Senior Managers’ Regime, but they’re the exception, not the rule, for Westminster."

Ring-fencing has been one of the major reforms to the finance industry since the financial crisis; it forces lenders to separate their retail and investment-banking operations by 2019.

The senior managers’ regime involves the implementation of tough new accountability rules.

Mr Bailey said of the misconduct scandals: ‘I’d like to think that era will be over…We’re still playing some of it through.’

On top of all that, the watchdog is dealing with ongoing issues such as an investigation into the former HBOS bosses and the 2019 payment protection insurance mis-selling claims deadline. Mr Bailey is also overseeing the move of the 3,350-strong organisation from Canary Wharf to Stratford – a move which is understood to be deeply unpopular among staff at the watchdog.

He said: ‘Yes the view will be different. But we supervise 56,000 firms and only some of the larger ones are down the road.’