Rob Cooper, CEO of LegalTech firm ME Group,  has called for a wider review into the FCA’s handling of redress schemes after the Treasury appeared to have historically lobbied regulators to ‘cut the cost’ for big banks.

John Swift QC recently published a damming report into the FSA’s handling of a compensation programme after thousands of businesses were mis-sold toxic interest rate hedging products.

The review highlights serious questions in the regulator’s approach, which the FCA admitted as ‘clear shortfalls.’

However, the report also highlights minutes of a meeting between the Treasury and the FSA on January 24th 2013, in which a Treasury official said: ‘The Treasury had been lobbied hard by the CEOs of the banks, particularly the two state-owned institutions.

‘As a result, the chancellor had come to the opinion that the total redress costs needed to be reduced, and that the purpose of the meeting was for HMT (HM Treasury) to understand the FSA’s proposals in order to find ways to cut the cost.’

Mr Cooper now wants the investigation to go a step further to look at any other instances where big banks were protected at the expense of their customers.

He said: ‘John Swift’s report not only highlights failings of the FSA; it now also confirms what many of us have been suspecting for a while, which is the banks were protected by HM Treasury placing undue pressure on a supposedly independent regulator.

‘There shouldn’t be any scenario where our independent regulator is being pressured by the Government to make decisions, otherwise it’s no longer independent.

‘The findings are damming, but it also begs the question about how many other times there has been external intervention to shield the big banks.

‘What really led to the FCA shutting access to compensation for mis-sold Payment Protection Insurance in 2019? Or when London Capital & Finance bond compensations were limited?

‘There are serious questions that need to be asked here. If the FCA is truly serious about protecting consumers as they say, then these are the issues it must have the answers for.’

Rob Cooper, CEO ME Group

To read the full ‘Lessons Learned Review’ click here.