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PM urged to ‘clean up’ financial services

PM urged to ‘clean up’ financial services

Prime minister Boris Johnson has been urged to get cross-party support in order to "clean up" the UK financial services sector to help it “flourish” post-Brexit.

In an open letter to the PM, Andy Agathangelou, founder of the Transparency Task Force, said parliament needs to push for a financial industry that the public can believe in, if it is to “flourish on the world stage post Brexit”.

It came after the Transparency Task Force held an event last week where individuals gave evidence of “serious misconduct” and “regulatory failure issues” in the financial services sector.

In his letter, Agathangelou warned the issues would not be dealt with properly unless there was “solid cross-party support for change”.

Agathangelou said: "It is clearly time for the UK’s Financial Services sector to be cleaned up.

“In financial services, reputational integrity and consumer confidence is everything, be that on an individual, corporate or national level; and for that reason, I respectfully ask you to intervene and help us get to the truth about what has been going so badly wrong in the UK’s Financial Services sector.”

He gave some examples of where the sector had failed in the past, including Dame Elizabeth Gloster’s scathing report into the Financial Conduct Authority’s handling of LC&F, Raj Parker’s report on the FCA and Connaught Income Series 1 and recent criticism from MPs that the City watchdog “is not fit for purpose”.

Agathangelou said: “Reports of system-wide failure from highly-respected peers of all political persuasions and even the FCA itself feeling the need to apologise for its own poor performance, all point to one thing - our financial sector has a problem; and given the importance of financial services to the UK post Brexit, that means our country has a problem too.”

Last month (March 8), Conservative MP Peter Gibson called for an independent report into the Blackmore Bond scandal to investigate exactly what went wrong.

Blackmore Bond raised millions of pounds from investors to fund property developments between 2016 and 2018, but the company fell into administration in April last year owing £46m to investors after several months of rocky waters in which it failed to pay interest due to bondholders.

Agathangelou said while some have been calling for a major debate in parliament to “get the truth out into the open”; some felt the problems were so bad the country needed a forensic, Australian-style Royal Commission into financial services misconduct.

But others suggested all that was necessary was for the regulators to up their game and enforce effectively. 

He said: “I do not pretend to know what the best course of action is, but I do hope that parliament under your leadership can get to grips with whatever is wrong and move matters forward.”

Agathangelou wrote another open letter to the prime minister last month (March 22), alleging several regulatory failures in the financial services sector and suggested action should be taken soon.