Monday 26th September 2016                 Change text size:

Financial Conduct Authority Quietly Shelves Banking Culture Inquiry

Facepalm by hobvias sudoneighm via Flickr

The Financial Conduct Authority (FCA), has shelved plans for an inquiry into the culture, pay and behaviour of staff in banking. The inquiry was going to investigate whether pay, promotion or other incentives contributed to scandals involving banks in the UK and abroad.

In May, Reuters calculated that since the 2008 financial crisis 20 global banks had paid £152bn in fines and compensation to customers.

The FCA said that a “traditional thematic review” would not help achieve the “desired outcomes”. Instead, they had decided: “that the best way to support these efforts is to engage individually with firms to encourage their delivery of cultural change as well as supporting the other initiatives outside the FCA.”

Commenting on the New Year’s Eve news, Shadow chancellor John McDonnell told BBC Radio 4’s World at One: “This will be a huge blow to customers and taxpayers who are all still paying the price for the failed culture in the banking sector that’s been widely attributed to be among the main causes of the crash and the scandals over Libor and price-fixing.”

Percival Stanion, of Pictet Asset Management, on BBC Radio 4’s Today programme, suggested that it was “no coincidence” that the investigation was being dropped at a time when HSBC was reviewing whether to keep its headquarters in London.

The BBC’s Business correspondent, Simon Jack said: “This will be seen by many as further evidence that regulators and the government have decided to take a softer line with the banks and bring the “banker bashing” era to a close.”

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