Shortly before he leaves the Financial Conduct Authority (FCA) to become Governor of the Bank of England, Andrew Bailey has been reflecting on his time as chief executive at the FCA and looking forward to the future.
Mr Bailey was interviewed for the latest Inside FCA podcast in late January 2020. Asked to name his greatest achievement from his time with the FCA, he mentioned the regulator’s work on vulnerable customers, commenting:
“One of the bigger issues that came out of the Mission was how we think about vulnerability and vulnerable people in society, vulnerable consumers and I’m very proud that, (a) I think we have led the way in that work and that thinking because other regulators are now following us, (b) because it’s led to some, I think, very big developments in terms of what we’ve done. So, I think about the interventions that we’ve made in high cost credit, the interventions we’re making in pricing and other areas, the interventions that we’ve made in terms of advice given to people and I think the fact that we’ve had this much greater focus on particularly those who are least able to deal with financial services, who need access to financial services.”
Mr Bailey commented that there will certainly be occasions in the future where the FCA and the Bank of England will work together, and also hinted that Brexit could increase the need for the UK’s financial institutions to take responsibility, as the European regulator will no longer be able to dictate policy in the UK. The FCA chief commented:
“We will be doing things on our own that in the past we’ve more tended to do as part of the European Union, so it will put more emphasis on the Bank and the FCA as domestic institutions.”
Payment protection insurance (PPI) has undoubtedly been a major issue in financial services over the past two decades. The podcast interviewer made reference to the PPI saga being “over”, even though a large number of complaints still need to be considered by firms and by the Financial Ombudsman Service. Mr Bailey said the PPI situation had been “fascinating” and spoke with pride about the Arnold Schwarzenegger fronted campaign. He suggested that the FCA could use some of the elements of the PPI deadline campaign in its ScamSmart campaign in the future.
When asked about the FCA’s supervision of payday lenders, Mr Bailey did not hold back, saying:
“We’re not trying to put them out of business, let’s be very clear, that’s not part of our function but I think it’s necessary and inevitable that we’re dealing with business models that frankly should not exist.”
The FCA chief said that certain areas of the consumer credit sector will pose a challenge for his successor, and he also mentioned the ‘perimeter’ – issues regarding whether certain activities are regulated – as another topic that will be in the next CEO’s in-tray.
Mr Bailey will succeed Mark Carney as Governor of the Bank in March 2020, and press reports suggest that the FCA will now have an interim chief executive for most of 2020, which is also when the post-Brexit trade negotiations will take place. Chris Woolard, the regulator’s Executive Director of Strategy and Competition, will be the acting CEO. Applications for the permanent CEO role are invited from both internal and external candidates.
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