FCA's new enforcement chief will 'nip misconduct in the bud'

The new enforcement chief at the City of London regulator said he aimed for financial misconduct to be "nipped in the bud" through better communication with companies.

In his first speech since being appointed as the Financial Conduct Authority's enforcement director (see video below), Australian Mark Steward said allowing problems to go unchecked was the quickest way to erode confidence.

Though acknowledging human nature meant a degree of misconduct was inevitable, he said the ability to "nip things in the bud" was something he aimed to bring to the regulator.

Steward, poached from the Hong Kong Securities and Futures Commission by recently ousted FCA chief Martin Wheatley, said there was "no drama" about sitting on the same table as banks such as Barclays on a regular basis.

"Misconduct that is detected quickly and is effectively uprooted should engender confidence in our market," he said.

"Confidence does not necessarily leak from the market when it occurs. But if it looks like misconduct is not detected quickly, it tends to suggest it might be tolerated or we are not effective in watching out for it or that our standards are too low."

If financial regulators become good at detecting misconduct quickly, this better reaction should engender more confidence in the market, he said.

Steward added that the FCA would "keep on" with previous focus on enforcement against firms and individuals.

His former boss Wheatley was said to be considered by the Chancellor to be too tough on the City, doling out more than £2bn in fines for the Libor and forex probes, and was ousted earlier this year as part of the Conservative government's post-election cosying up with the City.

The FCA's focus on fining companies resulted in fewer actions being taken against individuals, which Steward suggested would change going forward.

"I don't see that there's a polarity, it's not one or the other, often it's both," he said.