Wheatley says bank watchdog needs new staff

Tim Wallace
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REGULATORS need more and better staff to have any chance of really checking if banks are treating customers well, top official Martin Wheatley told MPs and peers yesterday.

And he rowed back on earlier comments that he will “shoot first and ask questions later” when regulating potentially dodgy bank products, admitting that regulators will have to wait for customer complaints before investigating.

The head of the incoming Financial Conduct Authority (FCA) told the parliamentary commission on banking standards (PCBS) he will rely on banks predicting the regulator’s questions and designing products accordingly, rather than each one being individually approved.

“I try not to take a view of products as good or bad – some are very complicated and difficult to understand, but for the right audience they may be the right product,” Wheatley said. But even if just one in a hundred products are referred to the FCA, Wheatley said it would need greater expertise to cope.

“We need to either upgrade or train our people, hire staff with a bit more battle scars, who are prepared to use their judgement,” he said.

Wheatley also revealed the lengthy process of launching a new bank will get easier in a review out next month.

Currently anyone wanting to set up a bank has to prove they have the staff, systems and capital before getting a licence – but they often need a licence to raise the capital.

Instead, provisional licenses could be granted in smaller steps through the process, Wheatley said, to open up the industry to new entrants.