More, Faster, Better: U.K. Bank Regulator's Misconduct Crackdown
(Bloomberg) -- The regulator in charge of policing misconduct at banks in the U.K. is piling pressure on himself by promising to detect wrongdoing quicker and broaden the type of the investigations pursued by his team.
Focusing on particular areas can make it easier for other crimes to go unnoticed, said the Financial Conduct Authority’s director of enforcement and market oversight, Mark Steward. More efficient management has enabled the FCA to deal with investigations 20 percent more quickly in the past year, Steward said.
“I don’t think there is any choice here," Steward said in a phone interview on Wednesday. “We are taking a much greater burden on our shoulders to not be selective about misconduct." Steward said the approach “is enormously ambitious and not without its risks in execution. But the ambition is absolutely necessary.”
Steward’s approach is in keeping with the diverse nature of the scandals swirling around the financial industry. His team is investigating Barclays Plc head Jes Staley’s attempt to uncover the identity of a whistle-blower. This month, it also banned the so-call Crystal Methodist, a former bank chairman and preacher who was found guilty of drug possession. The regulator has often been criticized for how long it’s taken to conclude investigations.
In a document outlining its enforcement approach, the FCA on Wednesday identified seven types of misconduct, ranging from mis-selling to money laundering. The regulator wants feedback on the guidance by June 21, before the final document is published next winter.
Steward, in his third year in the job, said his approach of rewarding companies and individuals that deal with misconduct head-on and come down harder on those that don’t could help nudge finance firms and bank bosses toward the FCA’s aim of going beyond pure compliance and encouraging more ethical behavior in general.
"It’s providing a strong incentive to firms to do the right thing before we have to do something," Steward said. "That will not only change behavior, but change culture."
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