Watchdog shelves third probe into banks

A THIRD banking industry inquiry has been shelved in a week by the City watchdog.

The Financial Conduct Authority launched a probe into investment advice almost two years ago after revelations banks, fund managers and insurers were ‘bribing’ financial advisers to sell their products.

But yesterday it emerged it has decided not to publish the results of its investigation, leading to accusations of a ‘cover-up’. On Monday it was revealed the FCA will not take formal action against HSBC over claims its Swiss private banking arm helped super-rich clients avoid tax.

This came less than a week after the FCA shelved plans for an investigation into pay and industry behaviour. Last night John Mann, a Labour member of the Treasury committee, said: ‘This sounds like a cover-up to me.’

A Treasury spokesman said: ‘We have taken concerted action to improve conduct across the banking sector and deal with the abuses… of the past.’

The FCA said ‘a focus on the culture in financial services firms remains a priority’.

ONLY f i ve days i nto the New Year, yesterday was ‘Fat Cat Tuesday’ – the day top executives’ earnings since January 1 surpassed the average annual salary of a British worker.

It was also the day the City watchdog shelved yet another investigation into malpractice in the banking industry – the third to be dropped by the Financial Conduct Authority within a fortnight.

True, the vastly inflated pay packages of FTSE-100 chief executives are a matter for shareholders, not the Government, while the Treasury protests that the FCA makes i ts own decisions, independently of ministers.

But perhaps the most damaging charge levelled against the Tories is that they are the party of the super-rich, more concerned with looking after grasping friends in the City than standing up for exploited customers.

George Osborne must make it a priority for 2016 to lay such suspicions to rest. He should start by strengthening shareholders’ powers to rein in exorbitant pay – and reminding the FCA of the job it was set up to do.