Bank probe gets the chop after Osborne’s 87 fat cat meetings
GEORGE Osborne was yesterday accused of forcing City regulators to scrap a probe into Britain’s banking culture.
Records show he has held almost 90 meetings with senior bankers since he took office in 2010 – including five in the three months following May’s general election. Critics yesterday claimed it was once again ‘business as usual’.
After the Financial Conduct Authority shelved plans for a farreaching inquiry into pay and behaviour in the industry, Lib Dem leader Tim Farron said: ‘The public are rightly fed up with the banking sector marking its own homework, and cutting out anyone with a critical eye.
‘Any hope of change and progress has been dashed.’
The Treasury has denied the Chancellor was behind the move, which appeared to draw a line under years of ‘banker bashing’ following the financial crisis. But critics claim the Chancellor has allowed his closeness to top City bosses to ‘skew his judgment’.
Government records analysed by the Daily Mail show that since entering No.11 Mr Osborne has held 87 meetings with banks including Goldman Sachs, UBS and Deutsche Bank as well as state-backed lenders Lloyds and Royal Bank of Scotland.
They in turn laid on a handful of dinners and lunches.
In July alone, Mr Osborne met with Jamie Dimon, chief executive of US investment banking giant JP Morgan, and representatives from HSBC, Standard Chartered and Santander.
Two months later, he held a meeting with Barclays and attended a lunch hosted by HSBC involving the Chinese ambassador.
The flurry of summer meetings came after his speech in June in which he promised a ‘new settlement’ with the banks – seen as a peace offering to the industry. It is not yet known how many times Mr Osborne met bankers in the final three months of the year.
The FCA inquiry was meant to examine whether pay, promotion and other incentives contributed to a host of wrongdoings including the Libor and PPI mis-selling scandals.
HSBC has been ordered to pay a record £28million for allowing money laundering to take place in its Swiss subsidiary and fined in the US for its role in aiding money laundering by Mexican drug cartels.
The move to scrap the inquiry comes after former FCA boss Martin Wheatley, who was reviled by bankers for his tough stance, was ousted by the Chancellor in July. Tory MP Mark Garnier, who sits on the Commons Treasury select committee, suggested the watchdog was pressured by Mr Osborne’s department.
He said: ‘There has always been this great argument that perhaps the Treasury is having more influence over the regulator than perhaps it ought to and certainly, if I was looking for a Machiavellian plot behind what’s happened here and the tone of the regulator, then I suppose I would start looking at the Treasury.’
Percival Stanion, of Pictet Asset Management, said bankers are now ‘heaving a sigh of relief’ and claimed it was ‘no coincidence’ that the inquiry was dropped when HSBC was reviewing whether to keep its headquarters in London.
David Hillman, of the Robin Hood Tax campaign, said: ‘Countless cosy chats with top City bosses are in danger of skewing the Chancellor’s judgment.’
Shadow Chancellor John McDonnell said the Tories were ‘reverting to regulation by the conversations in the gentlemen’s clubs’.
A Treasury spokesman said suggestions of influence over the FCA were ‘ridiculous and untrue’.
An FCA spokesman said it was still a ‘priority’ to focus on banking culture but efforts will now concentrate on dealing with firms individually.
‘Bankers heaving a sigh of relief’