Politicians are preparing to grill the UK's financial regulator over its 'odd' move to drop two banking investigations
The chairman of the Treasury Select Committee, a panel of politicians that examine financial public bodies as well as banks, Andrew Tyrie MP, confirmed on BBC Radio 4's Today programme that he would be hauling in FCA CEO Tracey McDermott and Chairman John Griffith-Jones to explain themselves:
"Each one [dropping the reviews] aren't crucial but cumulatively they do give the appearance of a weakening of a resolve and certainly the FCA's decision to drop its review into banking culture looks odd, after all it was in their business plan.
"And that's why the committee has decided to haul in the chairman and chief executive from the FCA to find out what is going on. Also to make sure they're getting on with implementing the new challenges they've been given by parliament.
"They have a tough job and we want to make sure they're doing it properly on behalf of millions of taxpayers and consumers."
This week Business Insider confirmed that the FCA quietly decided months ago not to take any formal action in its review of allegations that HSBC's Swiss private banking arm helped wealthy clients dodge tax between 2006 and 2007.
On New Year's Eve, the FCA scrapped a major report into Britain's banking culture. It instead chose to work directly with the banks, behind closed doors. It is being viewed as a victory for the banks.
Again, "there was no investigation, so there was nothing to drop," an FCA spokesperson said on December 31. "If there is no review, there's no findings."
In addition, the removal of Martin Wheatley - who was seen as an intrusive regulator- as FCA chief, and the appointment of new acting CEO Tracey McDermott (who began the closed door "culture" meetings) indicate that the FSA is no longer interested in aggressively investigating potential wrongdoing at banks, at least in public.
The non-decisions in both cases leave the public and politicians in the dark about what is really going on inside major banks.
"We now have a body that is almost rudderless," said Shadow Chancellor John McDonnell on BBC Radio 4's Today programme today about the fact that the FCA doesn't have a permanent CEO.
McDonnell added that "we are reverting to type" and all the lessons learned in the crisis may be forgotten.