Financial Conduct Authority  

FCA wants firms to make a profit

FCA wants firms to make a profit

Andrew Bailey has refuted claims the regulator does not want companies in the financial services sector to make a profit. 

Speaking on the regulator's inaugural "Inside FCA" podcast out today (May 14), Mr Bailey said the sector needed firms that "earn returns" but he added commercial success must be achieved in line with the Financial Conduct Authority's public interest objectives. 

The FCA's chief executive said: "We have a balance to strike in society. It sometimes gets put to us as a regulator, 'you don't want to see firms make any profit', and I say, no, that's ridiculous, because frankly we wouldn't have a financial services landscape [without it].

"We have to have firms that earn returns and earn what their shareholders expect. But it has to be balanced, it's always a balance."

Mr Bailey added: "Because as I said I am very pleased to see a successful financial services industry that will undoubtedly benefit consumers, but it has to be fair and it has to be sustainable.

"And we do come across, I'm afraid, practices which don't fit that description and we act upon it when we do."

Mr Bailey also confirmed the FCA intended to publish its proposed guidance on vulnerable consumers for consultation this summer, a move long awaited by the industry with the regulator expected to review how such policies are implemented. 

In February the Financial Ombudsman Service warned financial services firms must improve their treatment of vulnerable customers, after experiencing a "lack of empathy" from debt collectors who used aggressive customer service tactics on such consumers.

Today Mr Bailey also called for a "thorough debate" on the type of regulation which will be seen in the UK once it leaves the European Union.

He said: "I am not advocating lighter regulation, I'm not advocating heavier regulation either. 

"But there are different ways of regulating and the UK as a member of the EU has...obviously had to find its way within the framework of EU regulation.

"I think it is the point at which we have to ask what choices do we want to exercise going forward and how will those choices be consistent with what I hope, and expect, will be the open markets for financial services internationally that we want to see continue."

Mr Bailey added there were "big challenges ahead" for regulation, not just those related to Brexit, which the FCA must not "lose sight of", such as intergenerational issues, pension saving, debt within the younger population and access to housing finance.

He said: "For me, in terms of what are we trying to do in the year ahead, we'll still be dealing with Brexit but I want to make sure we are making clear progress and can demonstrate what we are doing on these other big issues.

"Because I do think our society here needs to see progress and frankly see there are solutions and approaches coming out of bodies like the FCA.