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George Osborne 'concerned' by FCA's behaviour George Osborne 'concerned' by FCA's behaviour
(about 1 hour later)
Chancellor George Osborne has said he is "profoundly concerned" by the behaviour of the city regulator, the Financial Conduct Authority (FCA).Chancellor George Osborne has said he is "profoundly concerned" by the behaviour of the city regulator, the Financial Conduct Authority (FCA).
It follows the FCA's leaking of information about a forthcoming inquiry into pensions and insurance policies. Millions of pounds were wiped off share values last week, after the FCA leaked information about a new investigation.
Mr Osborne said the events had been damaging both to the FCA and to the UK's reputation.Mr Osborne said the events had been damaging both to the FCA and to the UK's reputation.
The FCA has said the organisation's behaviour last week will be fully investigated, by an external law firm. The FCA has said the organisation's behaviour will be fully investigated, by an external law firm.
Mr Osborne has written to the FCA's chairman, John Griffith-Jones, warning him that the FCA must answer several key questions in its inquiry.Mr Osborne has written to the FCA's chairman, John Griffith-Jones, warning him that the FCA must answer several key questions in its inquiry.
"These events go to the heart of the FCA's responsibility for the integrity and good order of the UK's financial markets, and have been damaging both to the FCA as an institution and to the UK's reputation for regulatory stability and competence," Mr Osborne wrote."These events go to the heart of the FCA's responsibility for the integrity and good order of the UK's financial markets, and have been damaging both to the FCA as an institution and to the UK's reputation for regulatory stability and competence," Mr Osborne wrote.
InvestigationInvestigation
Martin Wheatley, the FCA's chief executive, admitted the leaked launch of the insurance industry inquiry was "not our finest hour".Martin Wheatley, the FCA's chief executive, admitted the leaked launch of the insurance industry inquiry was "not our finest hour".
The information caused some insurance stocks to plunge by 20% on Friday. The information caused some insurance stocks to plunge by up to 20% on Friday.
The FCA's investigation will look at whether the information released was market-sensitive.The FCA's investigation will look at whether the information released was market-sensitive.
Mr Wheatley told the BBC that he would not resign from his job - as some have demanded - but would await the outcome of the FCA's inquiry.Mr Wheatley told the BBC that he would not resign from his job - as some have demanded - but would await the outcome of the FCA's inquiry.
"I'm not in a good position," he said."I'm not in a good position," he said.
"I'm not defending that position, but there are processes that have to be gone through," he told Radio 4."I'm not defending that position, but there are processes that have to be gone through," he told Radio 4.
CriticismsCriticisms
The news that the FCA was going to investigate pensions, life insurance and endowment policies issued between 1970 and 2000 was leaked to a national newspaper last Friday.The news that the FCA was going to investigate pensions, life insurance and endowment policies issued between 1970 and 2000 was leaked to a national newspaper last Friday.
It was originally due to be publicised in the FCA's annual business plan three days later.It was originally due to be publicised in the FCA's annual business plan three days later.
However, after the newspaper article was published, it took the FCA six hours to issue a clarification.However, after the newspaper article was published, it took the FCA six hours to issue a clarification.
By that time, the share prices of several big insurers had fallen sharply.By that time, the share prices of several big insurers had fallen sharply.
Among the questions raise d by the chancellor are: Among the questions raised by the chancellor are:
Mr Wheatley said all the details would be examined in the forthcoming internal inquiry. Mr Wheatley said all the details would be examined in the forthcoming inquiry.
"There are a number of things that need looking into, and we've got an investigation that will do that," he said."There are a number of things that need looking into, and we've got an investigation that will do that," he said.
"I'm sure we will be very upfront about taking criticisms on board, and what we need to do differently," he told the BBC."I'm sure we will be very upfront about taking criticisms on board, and what we need to do differently," he told the BBC.
ConditionsConditions
So what are the implications for policy-holders who find themselves unable to get out of expensive policies they took out in the 1980s and 90s?So what are the implications for policy-holders who find themselves unable to get out of expensive policies they took out in the 1980s and 90s?
Having learnt the harsh lessons of premature publicity, Mr Wheatley was keen not to prejudge the outcome of the inquiry.Having learnt the harsh lessons of premature publicity, Mr Wheatley was keen not to prejudge the outcome of the inquiry.
He did say the FCA inquiry would look at the conditions that were set at the time the policies were taken out, whether they were clear, and whether they were fair.He did say the FCA inquiry would look at the conditions that were set at the time the policies were taken out, whether they were clear, and whether they were fair.
However - and this will be of comfort to the industry - he suggested that there would not be harsh penalties imposed for mistakes in the past.However - and this will be of comfort to the industry - he suggested that there would not be harsh penalties imposed for mistakes in the past.
"We would not be retrospectively imposing today's standards on activities of 10, 15 or 20 years ago," he said."We would not be retrospectively imposing today's standards on activities of 10, 15 or 20 years ago," he said.
It is not yet known when the inquiry into the FCA's actions will make its conclusions public.It is not yet known when the inquiry into the FCA's actions will make its conclusions public.