The Bank of England governor Andrew Bailey is to be interviewed as part of an inquiry into how regulators supervised collapsed mini bond firm London Capital & Finance (LCF), the investigations chair dame Elizabeth Gloster said today.
LCF went into administration in early 2019 with 11,600 investors losing up to £237m. LCF was regulated by the Financial Conduct Authority (FCA), which Bailey led at the time, but its mini bond offerings were unregulated.
Former High Court judge Gloster said today her report would be delayed by the impact of the coronavirus pandemic which has made it difficult to interview FCA staff.
Gloster had aimed to complete her investigation for the Treasury by 10 July, but it will now be delayed until 30 September.
The investigation had already faced “delays and difficulties” in getting documents and data from the FCA, but Gloster told investors in January that she was still on track for July completion.
Since then, FCA staff have had to work from home because of the pandemic lockdown and the watchdog has been dealing with urgent policy measures, affecting the timings of interviews with FCA staff, Gloster said.
The delay may well cause concerns for some LCF investors but the report would be “comprehensive and robust”, she said.
The head of the Treasury committee Mel Stride MP today said the delay was “concerning”.
“The delay in the investigation is particularly concerning. As Dame Elizabeth has said, the decision to delay may cause anguish to those who invested in LCF. We will want to get to the bottom of what role the FCA had in the delay when we next take evidence from them,” Stride said.
Bailey took over from Mark Carney as the Bank’s governor in March having previously bene chief executive of the FCA since 2016.
In a letter to the FCA published today, Gloster said she expects to interview Bailey and senior FCA officials in the first half of June.
FCA chair Charles Randell replied that despite “unforseen technology challenges” in providing documents, the regulator would do everything it can to support Gloster’s investigation.