FCA: Scrapping of bank probe not political

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The chairman of the City regulator, the Financial Conduct Authority (FCA), has said political considerations played no part in its decision to shelve an inquiry into the culture of banking.

John Griffith-Jones was asked at a Treasury Select Committee hearing whether the Treasury had leant on the FCA or undermined its independence.

He said that the "simple answer" was "no to both".

Acting chief executive Tracey McDermott said the suggestion was "nonsense".

Two senior FCA figures were speaking at a committee hearing called after it emerged that the inquiry, described as a "thematic review", had been scrapped.

The FCA had planned to look at whether pay, promotion or other incentives had contributed to scandals involving banks in the UK and abroad.

Ms McDermott told the committee the review had been shelved because "we didn't think that we would be able to put out something that was sufficiently useful or valuable to make it worthwhile spending resources and time on doing it".

She said the review would have duplicated other work carried out elsewhere, notably by the Banking Standards Board, which was "looking at precisely the same issue".

She said the FCA was now seeking to "build on work done by other bodies" and would be focusing on individual firms through regulatory supervision.

Banks around the world have faced huge fines from regulators for their involvement in numerous scandals.

In May last year, the news agency Reuters calculated that 20 global banks had paid £152bn in fines and compensation to customers since the 2008 financial crisis.

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