Andrew Bailey under fire for London Capital & Finance report
Andrew Bailey, Governor of the Bank of England, has come under fire for his statements that a London Capital & Finance report should not include names of particular individuals.
The author of the report – Dame Elizabeth, has submitted a Letter to the Treasury Select Committee, stating that:
“Mr Bailey’s primary assertion was that my report should “delete the reference to ‘responsibility’ resting with specific identified/identifiable individuals, whether the Executive Directors of Supervision or Mr Bailey.”
This was interpreted by many as an attempt by Bailey to avoid responsibility.
Today, the Bank of England issued a statement defending the Governor. According to BoE, Bailey’s legal representations were made in the context of a draft report which was not clear on the distinction between personal culpability or blame, and responsibility.
“At no point, was his intention to imply he did not take full responsibility. As the Governor said yesterday and to Dame Elizabeth, he fully accepts responsibility for everything that occurred during his time at the FCA and welcomed the opportunity yesterday to reiterate that, and his apology to bondholders”, the Bank says.
Dame Elizabeth conducted an investigation into the relevant events relating to the regulation of London Capital & Finance plc.
The Investigation has concluded that the FCA did not discharge its functions in respect of LCF in a manner which enabled it effectively to fulfill its statutory objectives. In all the circumstances, the Investigation concludes that the Bondholders, whatever their individual personal circumstances, were entitled to expect, and receive, more protection from the regulatory regime in relation to an FCA-authorised firm (such as LCF) than that which, in fact, was delivered by the FCA.
The root causes of the FCA’s failure to regulate LCF appropriately were significant gaps and weaknesses in the policies and practices implemented by the FCA to analyse the business activities of regulated firms.