Bankers let off hook for the third time in a week: Watchdog shelves mis-selling probe into revelations that financial advisers were being 'bribed' to sell products
- Financial Conduct Authority began investment advice probe two years ago
- Followed banks receiving fines for mis-selling risky stock market investments, often to the elderly and vulnerable
- Watchdog accused of 'cover up' after deciding not to publish investigation
- On Monday, FCA decided not to take action against HSBC over claims private banking arm helped rich clients avoid tax
- FCA shelved plans for sweeping investigation into pay and behaviour in the industry this week
A third inquiry into the banking industry has been shelved in a week by the City watchdog.
The Financial Conduct Authority launched the probe into investment advice almost two years ago after revelations banks, fund managers and insurers were 'bribing' financial advisers to sell their products.
It followed several banks receiving huge fines for mis-selling risky stock market investments – often to elderly and vulnerable customers.
But yesterday it emerged the watchdog has decided not to publish the results of its investigation, leading to accusations of a 'cover-up'.
The Financial Conduct Authority (file photo) launched a probe into investment advice almost two years ago after revelations banks, fund managers and insurers were 'bribing' financial advisers to sell products
The news comes after it was revealed on Monday that the FCA will not take formal action against HSBC over claims its Swiss private banking arm was routinely helping super-rich clients avoid tax – and less than a week after it shelved plans for a sweeping investigation into pay and behaviour in the industry.
It led to fresh accusations the FCA is 'going soft' on banks – and that the industry's powerful lobbying machine is increasingly holding sway over the Government and regulators. Last week the FCA was accused of bowing to pressure from Chancellor George Osborne to ditch its inquiry into the culture of UK lenders.
The advice probe focused on the use of 'inducements' dished out by financial companies to advisers, such as tickets for concerts and sporting events, with state-backed Royal Bank of Scotland one of those coming under fire after blowing £350,000 on hospitality suites at Wimbledon.
FCA sources insisted there was no point in publishing the findings, because tough new rules from Brussels on such inducements will render them outdated. But last night this defence received short shrift from MPs, and the Treasury Committee intends to question the Chancellor and acting FCA boss Tracey McDermott over its apparent softening in stance towards the banks.
John Mann, a Labour member of the committee, demanded the FCA hand over a copy of its report. He said: 'This sounds like a cover-up to me. There is no question the FCA and the Government is going soft on banks – this is a calculated and deliberate strategy.
The FCA investigation followed several banks receiving huge fines for mis-selling risky stock market investments – often to elderly and vulnerable customers
'We need to... find out who made the decision to shelve this investigation, who authorised it and how much the Treasury is behind it.'
Consumer campaigner Martin Lewis accused the Treasury and FCA of 'cosying up' to the banks.
Mr Lewis, founder of MoneySavingExpert.com, said: 'A series of reports have... been canned or hidden. My suspicion is there is pressure coming from the Treasury. I would not be surprised if these moves were designed to cosy up to the banks to ensure they keep their business in Britain. This comes at the cost of transparency and fairness for millions of customers.'
Last night the Treasury stressed that the FCA is independent and said suggestions ministers persuaded it to drop investigations are 'false and misleading'. A spokesman said: 'The Government has been absolutely clear that the integrity of the City matters to the economy of Britain, which is why we have taken concerted action to improve conduct across the banking sector and deal with the abuses... of the past.'
An FCA spokesman said 'a focus on the culture in financial services firms remains a priority'.
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