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UK's new financial watchdog no pushover

Thursday, March 21 17:25:33

The head of Britain's new financial watchdog said today it would be no pushover and would bring more individuals to book, but that threats and fines alone would not end the abuses blamed for the financial crisis.

Martin Wheatley played down a comment by his predecessor Hector Sants that the industry needs to "be afraid" of its regulator.

"You won't hear from us a 'be afraid' tone. We want a discussion with senior officials. We have to have a dialogue," Wheatley told a news conference.

"It's about having a balanced approach. It's important there is individual accountability. That will be a priority," he said.

The Financial Conduct Authority (FCA) launches next month, replacing the 11-year-old Financial Services Authority, as Britain's government ends a policy of "light-touch" supervision that failed to avert the 2007-09 financial crisis.

The FCA will enforce rules and punish breaches. A new unit at the Bank of England will ensure banks hold enough capital.

Wheatley said the FCA would be no "pushover". Its new logo, which highlights the C, is designed to symbolise a focus on the behaviour of financial professionals.

But he said relying on ever-larger fines to rein in market abuse and scandals ranging from financial product mis-selling to interest rate rigging would punish shareholders the most, in lower dividends and returns.

Company culture would only change if individuals were also held to account by regulators and customers, he said.

He dismissed suggestions that U.S. and British watchdogs, which have teamed up to fine three European banks a total of $2.6 billion to date for manipulating benchmark interest rates such as the London interbank offered rate (Libor), were failing to hold U.S. finance houses to account.

"We've tried to focus on the more egregious cases," he said. "Some of those cases have come out. Others will now follow." reuters