Following a speech by Martin Wheatley in which the Financial Conduct Authority’s head warned he was unhappy about existing arrangements, experts have said bank practises will remain under the regulator’s spotlight and urged there is a need for clarification of the rules surrounding bankers’ pay.
Speaking at the British Bankers Association annual conference in London, Wheatley (pictured) said the regulator had to encourage a link between integrity and profitability.
“We have a clear responsibility to replace, or repair, the structures that encouraged self-destructive tendencies in the past,” he said, adding that a “major problem” remained tackling financial rewards, even though the FCA has been working hard to improve incentives.
Experts, however, said that although Wheatley made clear that the steps taken so far were not enough to tackle problems like mis-selling, the regulator must come forward and set out rules governing bankers’ remuneration.
“Attempts by the regulator to change incentive based sales models inevitably lead back to the wider issue of regulating remuneration,” said Kelly Sheppard, a partner within business advisory Moore Stephens’ financial services team. “This is an area in need of urgent clarification from the regulator and legislation governing how individuals will be remunerated in the new year will be met with great anticipation across the industry.”
