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LONDON, Dec 31 (Reuters) - A public review of Britain'sbanking culture has been scrapped just months after it wasannounced, with the UK regulator saying on Thursday it had optedinstead to work with lenders individually to address anyconcerns.
The move will likely add to the public perception that theFinancial Conduct Authority (FCA) is softening its approachafter several years of "banker bashing" following the 2007-2009financial crisis.
It follows the departure of Martin Wheatley, seen by some inthe sector as a regulatory hardliner, as the FCA's chiefexecutive in July, and a dilution of impending rules to holdsenior bankers to account for regulatory breaches.
However, public antipathy to the industry remains high asbanks globally fight to improve their reputation aftermarket-rigging scandals, including in currency rates andinterest rate benchmarks, which have led to multi-million poundfines for the likes of Barclays and HSBC.
After announcing plans for a thematic review in March, theFCA had undertaken initial work on the project, before decidingthat publishing the report was not the most effective way tohandle the issue, a source familiar with the matter said.
Instead, it had fed back the findings to the banks concernedand would work with lenders individually to address any issuesaround corporate culture, the source added, confirming a reportin the Financial Times.
MISSED OPPORTUNITY
Mark Garnier, a member of the ruling Conservative party whosits on the Treasury Select Committee, a group of lawmakerswhich scrutinises economic and financial policymaking and whoserecommendations often require a government response, told BBCRadio he was disappointed by the decision.
"I think probably we are missing an opportunity to be ableto look at what is best practice and what is worst practice ofcourse across all banks," Garnier said.
Fellow Committee member and opposition Labour partypolitician John Mann was even more critical, saying on Twitterthe move was a "surrender to big banks".
"(The) whole point of scuppered FCA culture enquiry was tolook at the ethics and morality at the top of banking - orrather its absence," Mann said.
Stephen Platt, adjunct professor of law at GeorgetownUniversity and author of a book critical of the financialsector, said: "We are sliding back into the mentality thatproduced the crisis ... It is the flawed culture of banking thatlies at the root of the spectrum of appalling behaviour,including excessive risk taking, mis-selling, rate rigging,sanctions evasion, money laundering and the facilitation ofcrime."
The FCA said in a statement that a focus on culture infinancial services is still one of its priorities.
"There is currently extensive ongoing work in this areawithin firms and externally," it said. "We have decided that thebest way to support these efforts is to engage individually withfirms to encourage their delivery of cultural change." (Reporting by Simon Jessop, Paul Sandle and Andy Bruce; Editingby David Holmes)
Barclays (BARC)
HSBC Holdings (HSBA)
