Wake-up call for ‘bad’ bankers
BRITAIN’S new chief financial policeman has issued a stark message to the City of London: “We have barely got started.”
In an interview with The Independent, Martin Wheatley, head of the new Financial Conduct Authority, warned that people who believed watchdogs were already too tough had “a big wake-up call coming”.
Accusing bankers of avoiding responsibility for misconduct by hiding behind committee management, he raised the prospect of US-style prosecu-
‘We will shine a light into dark corners and take action’
tions of senior executives: “In the future we want individuals held to account.”
The Financial Conduct Authority, which will replace the Financial Services Authority, will have the power to launch raids on City offices and bring criminal prosecu- tions. Wheatley, who last week recommended that bankers who attempted to manipulate the Libor interest rate faced criminal prosecution, pledged to investigate and expose potential abuses in other sectors of the financial-services industry.
That could include the gold and silver markets, oil, foreign exchange and even agricultural commodities.
“We will shine a light into a number of dark corners and we will have to take action depending on what we find,” Wheatley said.
The regulator also accused banks of mistreating their customers to an extent that would be unimaginable in other consumer businesses.
“The truth is that if our supermarkets in this country, if John Lewis, operated in a way that banks do, they wouldn’t have any customers,” he said. “If companies were operating in a way that was thinking about the long-term interests of their customers then you wouldn’t need a heavyhanded financial regulation.”
Wheatley published his report into Libor interest rates on Friday which called for sweeping changes to the way they are calculated in the wake of attempts by traders at Barclays and other banks to fix them.
He attacked a mindset among banks that held that “you had to sell, you had to be earning by whatever means necessary” and pledged to force them to change their behaviour if they will not act themselves.
In addition to forcing changes to the way bankers are paid, Wheatley also detailed how leaders would be held to account if banks failed in future. This follows widespread public fury about the fact that no senior bankers have been prosecuted over the financial crisis.
“If there are failures in the future we want individuals held to account,” Wheatley said, admitting that fining companies did not work. “Ultimately the shareholders pay and it gets written off.”
He will change this by forcing banks to assign personal responsibility to bankers.
“Society wants us not just to be ticking boxes, asking if people have been following the rules, but to be looking at outcomes and at what’s going wrong and then taking action. That’s what I’ve been brought in to do and that’s what I will do,” he said.