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| George Osborne 'profoundly concerned' by FCA insurance leak | |
| (about 2 hours later) | |
| George Osborne has weighed into the row over the Financial Conduct Authority's botched announcement of a major insurance sector investigation, as the watchdog's embattled chief executive continues to resist calls to step down. | |
| In a letter to the FCA's chairman, John Griffith-Jones, the chancellor said he was "profoundly concerned" by the watchdog's leak of its insurance industry probe, which led to a heavy sell-off of insurance stocks and wiped billions of pounds off their stock market value last Friday. | |
| Osborne wrote: "These events go to the heart of the FCA's responsibilty for the integrity and good order of UK financial markets, and have been damaging both to the FCA as an institution and to UK's reputation for regulatory stability and competence." | |
| The FCA chief, Martin Wheatley admitted again on Tuesday morning that the organisation's intervention was not its "finest hour" – but said he did not consider resigning. "Yes, I will stay in my job. We've got a big job to do," he told BBC Radio 5 Live. | |
| The watchdog, which is taking over regulation of the consumer credit sector on Tuesday, is looking into how pension and life insurance firms are treating their longstanding customers. The chairman of the Treasury select committee, Andrew Tyrie, said the way the regulator released details of its investigation – via a press interview – appeared to be an "extraordinary blunder". The FCA has appointed a law firm to investigate the bungled announcement and has pledged to make its findings public. | The watchdog, which is taking over regulation of the consumer credit sector on Tuesday, is looking into how pension and life insurance firms are treating their longstanding customers. The chairman of the Treasury select committee, Andrew Tyrie, said the way the regulator released details of its investigation – via a press interview – appeared to be an "extraordinary blunder". The FCA has appointed a law firm to investigate the bungled announcement and has pledged to make its findings public. |
| Osborne welcomed the FCA board's decision to hold an inquiry, and stressed that it is "completely independent" – a point also made by the Association of British Insurers, which has written to the chancellor. The industry body described the events of last week as "very serious" and called for a longer term dialogue about how the government, industry and regulators can work together in future. | |
| The watchdog leaked details of the insurance sector probe to the Daily Telegraph and refused to confirm the report for six hours. Eventually it confirmed that it will scrutinise investments in life funds that are closed to new business, known as "zombie fund" policies, which were sold by doorstep salesmen between the 1970s and 2000. | The watchdog leaked details of the insurance sector probe to the Daily Telegraph and refused to confirm the report for six hours. Eventually it confirmed that it will scrutinise investments in life funds that are closed to new business, known as "zombie fund" policies, which were sold by doorstep salesmen between the 1970s and 2000. |
| Quizzed about the financial crisis, Wheatley told BBC Radio 4 this morning that "in the period leading up to 2008 the [banking] industry lost its moral compass." | Quizzed about the financial crisis, Wheatley told BBC Radio 4 this morning that "in the period leading up to 2008 the [banking] industry lost its moral compass." |