The U.K.’s Financial Conduct Authority (FCA) is taking a zero-tolerance stance on misconduct at banks. The regulator in charge of policing this has promised to detect wrongdoing more quickly and in more areas, according to Bloomberg Markets.
There’s a diverse range of scandals in the U.K.’s financial industry right now, which has prompted Mark Steward, director of enforcement and market oversight at the FCA, to step up the enforcement game. His team is looking into efforts by Barclays Plc Head Jes Staley to identify a whistleblower and also recently banned a former bank chairman and preacher found guilty of drug possession.
Steward’s approach is to reward companies and individuals who handle misconduct head on, while coming down harder on those who don’t. The overall goal is to push finance firms and bank leaders toward more ethical behavior rather than simple compliance, he said.
Under Steward’s leadership, the FCA has already accelerated its handling of investigations by 20 percent through more efficient management. The FCA is now working to incentivize firms and bankers to do the right thing before regulators have to step in, thus holding not only behavior, but financial culture in general, to a higher standard.
Steward told Bloomberg Markets that it’s easy to overlook crime in one area when the investigative team is focused on another one. That’s why he says it’s ambitious but critical to broaden the scope of investigations going forward.
“We are taking a much greater burden on our shoulders to not be selective about misconduct,” Steward said, adding that “I don’t think there is any choice here.”
In a document outlining its enforcement approach, the FCA has identified seven types of misconduct to watch for, including misselling and money laundering. The financial watchdog has also explained its process for identifying and investigating misconduct, with detailed sanctions and remedies that the authority can use to address serious misconduct.
The FCA is fielding commentary on the document through June 21. A final version will be published next winter.