FCA has ‘painful lessons’ to learn, says outgoing boss

The outgoing boss of the City watchdog has said that the organisation is likely to be made to sit through some painful lessons over the next few months as investigators prepare to publish several reviews of its potential failures.

Christopher Woolard, who has been interim chief executive of the Financial Conduct Authority since Andrew Bailey took the job as Bank of England governor, said that the FCA must go further than it has.

“We know we have more to do,” Mr Woolard said.

“In the autumn, we will see the results of a number of reviews into potential failures of the regulatory system. I have no doubt there will be painful lessons and the FCA will need to learn from them.”

Two years since London Capital & Finance – a £237 million investment scheme – collapsed, investors are still looking for answers over how the FCA handled the case.

Dame Elizabeth Gloster, a former Court of Appeals Judge, is due to give her verdict on the FCA’s behaviour on or before November 23.

As she delayed the report for the second time in August, Dame Elizabeth criticised the FCA for not handing over thousands of potentially important documents on time.

Campaigners have long criticised the FCA for failing small-time investors, especially those starved for options of where to put their money while interest rates remain at historic lows.

London Capital & Finance and Blackmore Bond are among the most high-profile failures of bond schemes that promised high returns.

“Enabled by the internet, we see scammers take advantage of people’s search for yield in the absence of healthy returns from safer, better-understood products,” Mr Woolard said.

“The FCA has made consumer investments a business priority and we’re determined to see better outcomes.

“We have banned or restricted some of the riskiest products and we have investigations under way into some of the bad advice we have seen. But there have been too many scams and too many scandals.

“We are open to making some major changes in our regulatory approach, and are calling for input to help us consider these.”

Mr Woolard will be replaced by Nikhil Rathi, who becomes the FCA’s permanent chief executive.