According to The Times, Barclays met supervisors at the Financial Conduct Authority 186 times last year, 101 more visits than were performed on HSBC, the second most frequently seen bank, according to figures released under a Freedom of Information request.
The Barclays visits easily surpass those of other British rivals, such as Lloyds Banking Group and Royal Bank of Scotland, which met FCA staff 58 and 65 times, respectively, based on the figures supplied to Bloomberg.
Several foreign lenders with large British operations were visited by the watchdog. Citigroup met FCA employees 57 times last year, while Goldman Sachs met officials 44 times. Deutsche Bank, which is under special measures in the UK because of concerns about control procedures in its British business, was visited 46 times last year.
All the banks visited by the FCA have had run-ins with the authorities. However, it is not known whether the visits were to do with particular investigations or enforcement actions. A visit from the FCA does not necessarily mean that the bank in question has done anything wrong, but is part of the regulator’s strategy of making sure it has a stronger grip on how individual businesses are run thanthe Financial Services Authority, its predecessor.
FCA officials have the power to demand to speak to any member of staff they deem important for their work and bankers say that supervisors will regularly haul individual traders before them during a visit to question them on the risks they are taking and why.
Many of these meetings are unscheduled, meaning that banks do not have a chance to prepare staff members before they speak to the FCA. This is to avoid the possibility that regulators meet only employees who have been pre-briefed on what to say.
The change in approach came after the Libor and foreign exchange-rigging scandals, in which regulators were accused of not having a proper grasp of banks’ behaviour and using a supervisory strategy that was too light-touch.
Last week, Martin Wheatley, the chief executive of the FCA, was pushed out by George Osborne in what has been seen as a victory for the banking industry, indicating a potentially softer approach to regulation in the future.
Mr Wheatley’s combative and aggressive tactics were widely hated by senior bankers and his resignation was seen as a possible move by the chancellor to rebuild frayed relations with the City of London after several years of heavy fines and increasing taxation.
His resignation came after he was informed that his contract as chief executive would not be renewed. Tracey McDermott, the FCA’s former head of enforcement, is set to take over as interim chief executive when Mr Wheatley’s term expires in September.
Ms McDermott has been widely credited with leading the FCA’s investigations into Libor and foreign exchange, leading to hundreds of millions of pounds in fines being paid by several of the world’s largest banks.
As if his hands weren’t full at Barclays, John McFarlane, the bank’s executive chairman, is to join the government’s Financial Services Trade and Investment Board to help to identify growth opportunities across the sector (Philip Aldrick writes).
Mr McFarlane, also the chairman of TheCityUK, the industry lobby group, will be joining the government’s task force as an external member. Nicknamed “Mack the Knife”, he ousted the Barclays chief executive this month and is leading plans for a radical cost-cutting strategy that could result in 30,000 job cuts.
George Osborne set up the FSTIB in 2013 and relaunched it yesterday, having had success in establishing the first Chinese yuan clearing bank in London.
Joining Mr McFarlane as an external member will be Helena Morrissey, the chief executive of Newton Investment Management, Inga Beale, the chief executive of Lloyd’s of London, and Nathan Bostock, the chief executive of Santander UK.
Sir Gerry Grimstone, the chairman of Standard Life, is leaving the FSTIB board to be an external member. Chris Cummings, TheCityUK’s chief executive, and Xavier Rolet, the chief executive of the London Stock Exchange, will remain on the board. Douglas Flint, the chairman of HSBC, is among those leaving at the end of their two-year term.
The announcement came as TheCityUK published figures showing that financial services delivered a record trade surplus in 2014, helping to offset the deficit in manufactured goods. The UK sold £62 billion more financial services abroad than were imported last year, a 4 per cent increase on the previous year.
