FCA Boss Faces Growing Backlash from Westminster
The head of the City watchdog is facing growing criticism from Westminster, as Treasury Ministers and MPS reportedly have “serious doubts” about his leadership skills.
Martin Wheatley, the Financial Conduct Authoriry (FCA) Chief Executive, has seemingly lost the support of senior politicians, as they believe the regulator has failed in its duty to protect small firms who were mis-sold risky insurance by British banks. Critics believe the FCA has lost credibility due to a bungled leak of market sensitive information about the insurance industry probe in 2014.
A Westminster insider recently commented: “There are serious doubts about Martin Wheatley across the piste, including from inside the Treasury. There is currently a massive row over whether he should remain in his post.”
It is believed that Andrea Leadsom, Economic Secretary to the Treasury, is among the most high-profile critics of the Chief Executive.
Guto Bebb, the chairman of the parliamentary group that supports small businesses who were mis-sold risky insurance from banks, recently said: “There is a real concern in Westminster that the FCA is lacking basic competence. I do not want to personalise this, but that does bring into the question the suitability of Martin Wheatley.”
The Treasury, which is responsible for the employment of the FCA boss, recently commented: “The FCA and Martin Wheatley have the government’s full support. To suggest otherwise is simply incorrect”.
Mr Wheatley has run the FCA since it replaced the Financial Services Authority in April 2013. Since his appointment, he has been applauded for taking quick action against firms that rigged foreign exchange markets. As a result, the FCA fined £1.1bn to five banks, including Royal Bank of Scotland, in November 2014.
Pressure has, however, been placed on the watchdog since the botched leak to the press about a probe into old investments and pensions policies hammered insurances company shares in March 2014.
This drover chancellor George Osborne to write a passionate letter to John Griffith-Jones, the FCA’s chairman. An independent report by Simon Davis, who is a partner at the law firm Clifford Chance, criticised the FCA for the leak, although he did not heavily criticise Wheatley directly.
The Treasury Select Committee has recently accused the FCA of reaching a secret deal with the UK’s largest banks to water down a multi-billion compensation scheme for small firms who were mis-sold interest rate swaps, along with loans.
MPS questioned the credibility of the scheme in a report released earlier in March 2015. An FCA spokesperson stated the regulator is confident in the scheme, which has paid a total of £1.8bn to 11,000 firms, and is “fair and reasonable”.