Tracy McDermott, the former head of enforcement at the FCA, who was made stand in CEO when Martin Wheatley was unceremoniously given the heave-ho, let it be known that she did not want the top job permanently. There were sighs of relief in some quarters, including this influential publication. As head of enforcement she had seemed strong in rhetoric but short in substance. That said, if ever there was a poisoned chalice this is it. Wheatley was brought in to be tough on banks after the benign incompetence of Hector Sants and his predecessor as the head of the regulator, John Tiner, provided fertile ground for villainy. But he was apparently too tough and the banks showed their strength by getting the chancellor to sack him. Then the FCA said that they were going to conduct an inquiry into the ’culture, pay and behaviour of staff in banking’, but this has now been dropped, presumably under more pressure from the banks. Instead the FCA will ‘encourage the delivery of cultural change’. Wow! So that’s OK then!
Now we learn that Andrew Bailey, current head of the PRA is to take the helm. Bailey has worked at the Bank of England since 1985 so his appointment is bound to raise questions about the watchdogs’ independence from the PRA and the Bank of England. Bailey had his eye on the Governorship of the Bank of England before Mark Carney got the job. There was a strong lobby of opinion at the time which said that he missed out because he had not emerged from the LIBOR scandal smelling of roses. So there we have it. An unimaginative, uninspiring appointment which promises more of the same. Pity.
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