The acting chief executive of the Financial Conduct Authority has come under fire for her decision to abandon a review of banking culture.
Tracey McDermott, who said in January that she was withdrawing from the search to find a permanent head of the Canary Wharf-based regulator, said the decision to axe the report was hers alone.
This followed claims of pressure from the Bank of England to back off the banks at a time when Chancellor George Osborne was signalling the end of hostilities that had begun with the 2008 crash.
The FCA denied any outside influence on the decision which came two weeks after the previous hardline chief executive, Martin Wheatley, was forced out.
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Now Ms McDermott has been accused of “washing her hands” of banking culture by MPs on the public accounts committee.
She said: “The reason we decided not to conclude this piece of work is that we look at what other bodies were doing and the work we were proposing to was not going to add sufficient value for us to be worth us doing it.
“A better way for us to do that was to continue to engage with individual firms and their culture. The intention was not to say we weren’t interested in culture but to produce a report that was going to be motherhood and apple pie because it was so generic was not a useful use of our resources. We are still looking at culture but in a different way.”
But MP Richard Bacon said: “People adhere to the standards because of the culture of the firm they are working yet you have washed your hands of that issue.”
Ms McDermott denied the charge and said: “We are still doing a large amount of work on culture but we are doing that work in a different way. Culture is an important driver of how people behave that is far more important than whether they comply with our standards, our standards are a minimum requirement.”