Incoming head of the FCA, Andrew Bailey, yesterday outlined his views on banking culture at a conference in London. His speech was a veiled retort to those who have criticised the conduct regulator's controversial decision last autumn to drop a wide-ranging review of banking culture. This decision was the subject of Parliamentary scrutiny during a temperamental exchange at a Treasury Select Committee in January with Tracey McDermott, outgoing interim head of the FCA.
Effectively putting to bed, once and for all, the prospect of reviving a review of culture, Bailey said: "As regulators, we are not able, and should not try, to determine the culture of firms. We cannot write a regulatory rule that settles culture. Rather, it is the product of many things, which regulators can influence, but much more directly which firms themselves can shape."
Bailey went on to outline the core themes which the industry should expect to dominate the early part of his term in office including;
In passing, he also endorsed the merits of the Senior Managers Regime in tackling poor culture – although the regime's impact is, as yet, untested. And he countenanced against management over-confidence ("the risk of hubris").
The speech sets the tone for the next phase of regulatory engagement and suggests that the recent easing of regulatory intrusion may have been but a brief pause for breath.
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