British bank bosses are not getting the message through to staff about rooting out conduct that led to the financial crisis and to customers being ripped off, Bank of England Deputy Governor Andrew Bailey said. Many of the largest banks required taxpayer-funded bailouts and were embroiled in scandals including mis-selling loan insurance and complex interest-rate hedging products and rigging global foreign exchange and benchmark interest rates.
Bailey takes over as chief executive of the Financial Conduct Authority (FCA) after its first CEO, hard-liner Martin Wheatley, was ousted by British finance minister George Osborne, in a move widely interpreted as a desire to go easier on banks. Running banks is now far more about managing changes to business models than winning new clients, and although the tone of management has changed, this has not filtered all the way down through the organisations, Bailey told the Reuters Regulation Summit.
"The big challenge for them is ... what is called bridge to engine room," he said on Monday. "How do you know what your business is doing?" Bailey, whose appointment was well received in London's financial circles, said the high level of complaints to the Financial Ombudsman, and the volume of grievances being validated, shows that British banking still needs reform.