MPs grill City watchdog chief as Tesco Bank and RBS fallout rocks the sector
Talk about bad timing: The City watchdog boss has today faced a grilling from the influential Treasury Select Committee as the banking industry is still reeling from a hectic few days.
Andrew Bailey, chief executive of the Financial Conduct Authority, appeared before the MPs as customers at challenger Tesco Bank await to hear how bad the weekend's cyber attack was, and on the same day his agency published its long-awaited conclusions on Royal Bank of Scotland's Global Restructuring Group (GRG).
Bailey today described the Tesco Bank attack as "unprecedented and serious".
However, he acknowledged that talented tech staff could be hard to come by in the City, so much so that the regulator was aware it "had to pay a premium" to be able to plug its own job vacancies for such employees.
Read more: Better, not less, red tape would really help financial firms
On RBS, Bailey said he was "disappointed" the details of the GRG announcement had been leaked before it was officially announced, particularly as it contained market sensitive information. He noted his agency would be running an inquiry into whether it had played a role in the leak.
The chief of the City watchdog also pushed back on a Sunday Telegraph story published last month, which hinted the regulator could be about to let the bank off the hook completely over the activities in the GRG unit, pointing out that his agency's statement this morning explicitly noted it was still considering what actions it would take.
Read more: Meet the 18 companies joining the FCA's regulatory sandbox
While the FCA concluded RBS did not purposely set out to push small businesses into the GRG division on a routine basis, the watchdog still noted some isolated incidences of poor practise as well as more widespread problems with how the lender has treated small business customers, such as failure to document rationale when transferring customers to GRG.
Unsurprisingly, Bailey was also quizzed on what his post-Brexit preferences would be, particularly in maintaining access to overseas markets for the UK once the country leaves the European Union.
While the watchdog chief spoke in favour of securing some sort of equivalent set of rules, he added that "a world in which we [the UK] were a taker of standards" would be a less than satisfactory one.
Read more: Banks don't want to leave London post-Brexit, says City watchdog boss
While both he and John Griffith-Jones, chairman of the FCA who appeared alongside Bailey, were keen to secure as robust transitional arrangements as needed for the industry, they both noted that they couldn't give a precise answer on what exactly would be needed until the final Brexit deal was known.