FCA scraps banking and insurance probes

The UK financial regulator has scrapped a series of major reviews into banking and insurance, in what is being read as a significant softening of the government's stance on financial regulation.

Following the New Year's Eve revelation that the Financial Conduct Authority had ended its review into banking culture, the watchdog has now also reportedly closed an investigation into the way banks incentivise their staff to sell financial products.

A third probe into how insurance companies use customer information is also reported to be on the verge of being shelved.

Five months after the departure of combative chief executive Martin Wheatley and nine months after he announced the review, it was reported by the Financial Times on New Year's Eve that the FCA had decided that publishing the report on banking culture was not the most effective way to handle the issue, with the authority instead saying it would work with lenders individually to address any concerns.

Another source told Reuters that the initial findings had been passed to the banks that the FCA will now work with lenders individually to address any issues around corporate culture.

Conservative MP and Treasury Select Committee member Mark Garnier was critical of the decision.

"I think probably we are missing an opportunity to be able to look at what is best practice - and what is worst practice, of course - across all banks," Garnier said in an interview with the BBC.

Fellow committee member John Mann said the withdrawal of the review was a "surrender to big banks".

"The whole point of the scuppered FCA culture inquiry was to look at the ethics and morality at the top of banking - or rather, its absence," Mann said.