The chair of the City watchdog has defended the organisation against accusations of government interference, as he expressed irritation at George Osborne publicly announcing the withdrawal of one of the frontrunners to lead the regulator.
John Griffith-Jones said it “wasn’t ideal” that the chancellor revealed on radio that Tracey McDermott, the acting chief executive of the Financial Conduct Authority, would not be taking the job full-time. Griffith-Jones’s admission came as he fielded concerns from MPs that the organisation he chairs is lacking in independence, is too weak and is low in morale.
Referring to Osborne’s comments in early January, he said: “I was in the dentist’s chair at the time. I never got out so quickly.”
Griffith-Jones was speaking to members of the Treasury select committee, who wanted to know why the FCA, whose former chief executive, Martin Wheatley, was not given a new contract last year by the chancellor, had recently dropped a review into banking culture.
When asked by the committee chair, Andrew Tyrie, whether the FCA had been put under pressure to do anything that would compromise its independence over the decision to jettison its culture review, Griffith-Jones said: “No. I did not feel a sense of pressure at all.”
Members of the committee quizzed the FCA chairman as to why the decision to discontinue the review into banking culture had not been communicated by the regulator with a full statement. Instead, it was allowed to leak out after the FCA had already informed a number of people about its decision.
Towards the end of the session, Griffith-Jones said it might have made sense to have announced the decision formally. “But we haven’t explained these sort of decisions in a lot of detail before,” he said.
The committee heard how the FCA had relayed its decision to banks involved in the culture review in December. The story emerged on New Year’s Eve.
Griffith-Jones said the decision did not reflect an organisation that was going soft on banks. “There are many ways to skin a cat,” he said. Both he and McDermott insisted that the FCA felt there were better ways of making an impression on banking culture than continuing with its review.
McDermott said: “The reaction to the decision [to ditch the review] is based on the concern that there has been a change of direction. That’s not what it is.”
She added: “Every decision that I have taken has been taken on merit. We need close liaision with the Treasury, as we did the other days on the cap on exit charges.”
But the acting chief executive found it difficult to disguise her irritation about the way her own decision not to stand for the top job full-time had been released by the chancellor. “It rather threw the day’s plans,” she said. “I hadn’t anticipated having to address the staff. It would have been preferable to announce it once they all knew.”
Griffith-Jones added: “The substantive point is that we get a strong successor. We were in a tight spot in the summer and now we need a full-time replacement. We need support and confidence to do our job.”
This article was written by David Hellier, for theguardian.com on Wednesday 20th January 2016 19.39 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010