Gina Miller has published a report highlighting the “regulatory failures” in the UK financial services sector during Andrew Bailey’s tenure as CEO of the Financial Conduct Authority (FCA), calling for Chancellor Rishi Sunak to review Bailey’s appointment as the new Governor of the Bank of England.
Launched as part of Gina Miller and fund manager Alan Miller’s long-running True and Fair Campaign, the report highlights the “poor regulation and consumer outcomes in UK financial services” over the past four years, with Gina Miller warning Bailey’s appointment at the BoE would be “a gross betrayal of the Government’s duty to protect consumers”.
Published today (25 February), the report – Asleep at the Wheel: An exposé of systemic regulatory failure and consumer detriment, lays the blame for the suspension of the £2.5bn M&G Property fund and 300,000 Woodford IM investors losing over £1bn at the door of the FCA, due to it failing to regulate illiquid funds or warn consumers of the risks in time, and its shortcomings in effectively regulating the investment industry.
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The report also claims the FCA fell short in dealing with: a complaint by a whistle-blower against the failed HBOS Group; publishing its own independent investigators’ report into the “abusive” treatment of RBS business customers and responding to a whistle-blower’s warnings about London Capital & Finance, which collapsed leaving 11,600 retail customers with losses of up to £236m.
The True and Fair Campaign is now calling for the House of Commons Treasury Select Committee to summon Bailey to address the issues raised in the report and for the Commons Treasury Select Committee to launch an independent review of the appointment process relating to the roles of Governor of the Bank of England and CEO of the FCA.
Gina Miller commented: “Andrew Bailey’s tenure as CEO of the FCA has been characterised by a toxic cocktail of negligence, incompetence and indifference to the needs of ordinary depositors, investors and pensioners.
“On his watch, hundreds of thousands of Britons have lost money – in many cases, losing their life savings, which has devastated their lives, families and businesses. The report makes it clear Bailey is not a fit and proper person to be the next Governor of the Bank of England. Were he to be confirmed in this highly responsible and prominent role, it would be a gross betrayal of the Government’s duty to protect consumers, and a textbook example of rewarding failure.
“Bailey’s successor at the FCA must satisfy policymakers and the public they are competent and committed to protecting consumers and to ending the apathetic culture within the FCA that Bailey appears to have effectively institutionalised.”
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British politician Sir Vince Cable described the report as “a damning indictment of failure by the FCA to exercise proper regulatory oversight over conduct within the banking and wider UK financial services system.”
He said: “As Secretary of State for Business I put forward to the FCA detailed evidence on the conflicts of interest and other failures by the GRG division in RBS during and after the financial crisis.”
The finance ministry has countered the claims and argued that Britain needs experienced, credible leadership and “with nearly forty years of experience UK monetary and financial policy, his record speaks itself”, as reported by Reuters.
The FCA has also rejected the claims and suggested the report contained “numerous inaccuracies” and demonstrated “little understanding” of the role of the body.
The Bank of England said it would not comment on the report.