LONDON Aug 26 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)