* Watchdog criticised for "parking ticket" fines for banks
* PRA's Bailey shows no regret over Diamond departure
By Huw Jones
LONDON, July 18 Britain's financial watchdog
drew complaints on Thursday that it had failed to prosecute
enough bankers and delayed too long a report on what went wrong
at HBOS, after UK taxpayers were forced to bail out several
At the final meeting of the Financial Services Authority,
which was relaunched with greater powers as the Financial
Conduct Authority in April, one audience member said supervisors
had simply doled out fines equivalent to a parking ticket.
Martin Wheatley, chief executive of the new entity, said it
would soon publish the report into HBOS, which was taken over by
rival Lloyds after it got into difficulties in 2008,
only for Lloyds to discover billions of pounds of losses that
required taxpayer money to staunch.
"It has not fallen between the cracks," Wheatley said at the
final meeting of the FSA. He said individuals highlighted in the
report would be given a chance to challenge the findings ahead
of publication, a process that took 6-7 months with a similar
The Prudential Regulation Authority is also helping with the
report and its chief executive Andrew Bailey, responding to
repeated questioning, said the work was "well underway and at a
well advanced stage". He gave no publication date.
FCA Chairman John Griffith-Jones recused himself from one
board meeting when it discussed the report because he is the
former head of accountants KPMG, who audited HBOS.
He said the FCA had signed a memorandum of understanding
with auditors that required them to swap information with
regulators and blow the whistle on breaches of rules at banks.
The HBOS report was requested by UK parliament's treasury
committee, keen to see more bankers hauled over the coals for
reckless behaviour that also led to RBS needing help.
Wheatley said regulators would get tougher criminal powers
to curb reckless behaviour but noted the FCA had no policy of
targetting high profile scalps in the industry.
"We will see a change and you can be confident that, looking
forward, accountability will rest on the shoulders of senior
people in financial institutions," Wheatley said.
Last year the FSA and the Bank of England were criticised
for over-reaching themselves in forcing the departure of Bob
Diamond as chief executive of Barclays.
On Thursday one former FSA official asked what judicial
process was followed internally before taking this action.
Bailey said the FSA had found a "pattern of behaviour" at
Barclays that was brought to a head by the bank's fine last year
for rigging the Libor interest rate.
He signalled no regrets in the way Diamond was dealt with.
"We are very clearly committed to being a forward looking
regulator with the use of judgement," said Bailey, who is also
Deputy Governor of the Bank of England.