UK financial watchdog criticised for demanding personal pledges
LONDON Aug 26 (Reuters) - Britain's Financial Conduct Authority is too quick to make top staff at firms pledge formally to carry out changes the watchdog orders, a body representing financial firms has said.
Graham Beale, chairman of the Financial Conduct Authority's Practioner Panel, said there was concern at the increasing use of "attestations", whereby the watchdog forces an individual at a supervised firm to sign up to making specific changes.
The FCA was launched last year to shake up supervision that was found lax in the run up to the 2007-09 financial crisis.
Lawmakers have put pressure on regulators to make bankers directly accountable for their actions after few were brought to book during the crisis. The FCA has warned it will be far more intrusive than in the past.
Beale, who is also the chief executive of Nationwide Building Society, told the watchdog in April that the panel also had misgivings about the reliance on senior managers attesting that they will take action.
"Our report ... highlighted that we believe the tool was in danger of skewing prioritisation of risk at firms," Beale said in his letter to the FCA that was made public on Tuesday.
The Practioner Panel is made up of top figures from Britain's banking, asset management and insurance industry and its views carry some clout.
But the FCA, determined to enforce stricter risk controls upon the industry and break with the more consensual approach of the past, appears unlikely to give up using attestations.
Clive Adamson, the FCA's director of supervision, in a response also published on Tuesday, defended the use of attestations, saying they were an important supervisory tool.
"It is not our intention to create onerous or additional assurance processes within firms which go beyond what the firm sees as reasonable," Adamson said in his letter to Beale.
Attestations should have specific, achievable and demanding but realistic timelines, Adamson said.
Guidance for FCA supervisors on the use of attestations will be revised to ensure clarity and consistency in use, with internal checks on their use.
"Going forward, we are looking to publish data on attestations on a quarterly basis," Adamson said. (Reporting by Huw Jones; editing by Tom Pfeiffer)
- NOAA employee charged with stealing U.S. dam information
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade
- Hong Kong protesters march after fruitless talks with government
- Sweden gets two new sightings, as hunt for undersea intruder goes on
- U.S. to funnel travelers from Ebola-hit region through five airports