21Jun

Mark Steward, Director of Enforcement and Market Oversight at the Financial Conduct Authority (FCA) addressed the Banking Litigation & Regulation Forum in June 2018. Noting that it was ten years since the 2008 financial crash, his speech was entitled “Has the industry improved ten years on?”

Mr Steward began by speaking of his personal experiences of the global crisis when working for the Hong Kong regulator. He described how “public anger and protest was directed not only at banks who had sold this paper in large volumes, but also at regulators and the financial system in general”, and added that “confidence and trust, as well as savings, were the first casualties.”

Now, having taken a senior role at the FCA in the meantime, the speaker posed the question of “whether the public anger that erupted ten years ago has entirely dissipated which brings me to today’s main question of whether we are now in a better position.”

Much of the rest of the speech was devoted to explaining the approach the FCA now takes, and to documents it has issued recently such as the Mission, the Approach to Supervision and the Approach to Enforcement.

Regarding his organisation’s Mission, the FCA director said that “our Mission is to serve the public interest through the objectives given to us by Parliament in the legislation that we administer,” and added that the FCA “will focus on harm or potential harm to consumers, markets and firms as the springboard for regulatory intervention.”

Next, he highlighted that the consultation periods for the Approach to Supervision and Approach to Enforcement close on June 21.

Some of the discussion points in the Approach to Enforcement that were referred to in the speech included:

  • The FCA needs to treat the detection of serious misconduct as a priority, as failure to detect misconduct leads to a loss of confidence and trust in the marketplace
  • The over-riding principle of the FCA’s approach to enforcement will be the need to achieve fair and just outcomes
  • The FCA is prepared to impose less severe sanctions on firms who voluntarily elect to pay redress to disadvantaged parties
  • The FCA will explain the thinking behind its enforcement decision making so that its actions can educate other firms

Linking the themes of enforcement and supervision, Mr Steward observed that “the incidence of misconduct can be reduced, but not wholly eradicated by better conduct and regulation.” He also suggested that “[the FCA’s] ability to anticipate better, to detect and to manage what has gone wrong, especially our ability to detect suspected misconduct, as early as possible, needs to improve.”

Returning to the central question of his speech, as to whether the industry has improved in the last ten years, Mr Steward concluded by saying:

“I still hear the noise. The memory is not painful at all: for me, it is a good and helpful reminder of what is really at stake.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article