Chief executive of the Financial Conduct Authority (FCA) Martin Wheatley will speak tonight about lessons learnt and challenges ahead for the financial world, highlighting the importance of fairness and cultural reform in preventing future crises.
The regulator will say that there is no room for complacency, despite an improving situation: “poor conduct is still a daily staple of the news – most recently in the wholesale markets. And until this flow of headlines slows, until the change is real and manifest, it will prove difficult to deliver confidence.”
The two challenges that face the UK are: looking ahead more effectively in order to prevent crisis, and to respond to a changing world with our own cultural reforms.
Dealing with criticism of the FCA, Wheatley will emphasise the regulator's early tackling of issues like interest only mortgages, saying that it has, in the past, been slow to act and inconsistent.
He'll add that the FCA needs to be “transparent” when it comes to cases, and demonstrate fairness by dealing with problems adequately. The injustices around mis-selling of interest rate swap agreements were compounded by the response of financial services.
Lloyds Banking Group announced today that it would begin the process of compensating customers who lost out in the mis-selling scandal. The regulator condones Lloyd's decision to fast track compensation the bank knows it owes, whilst working on a second stage calculating redress for other consumers. Wheatley will say:
In a situation where many small employers who took out these products may be struggling to make ends meet – the industry is deceiving itself if it imagines that a total of 32 offers accepted, totalling £2m, is adequate progress.
The chief executive will round off by saying that the financial world “is getting its act together” and that, although there will be setbacks, fairer deals will be seen in the future, with the regulatory system “genuinely reformed”.
He will be speaking at 9pm at Mansion House.