The FCA’s online annual meeting was a stage-managed sham

The Financial Conduct Authority must go back to holding a proper face-to-face annual public meeting. Thursday’s charade, where the regulator’s chairman and executives addressed an empty room, was a squirm-inducing car crash.
Every user of financial services indirectly pays the £699 million that keeps this accident-prone organisation on the road. Public accountability is crucial. The live-streamed meeting was a stage-managed sham.
Questions had to be sent in online in advance. The chairman Ashley Alder then tried to paraphrase them, stumblingly, and even cheekily tried to interject his answer before he’d completed telling us what the question was.
There was no chance for the questioner to have their own voice heard or to contradict the speaker or to interject with a follow-up question, a much-needed requirement when Alder’s team blathered and dodged the issues.
There was no sense of what the wider audience was actually thinking. In a conventional public meeting, we get a feel of how the panel is being received, whether with applause or (surely a more likely response in this case) boos.
And there was a strong suspicion that some awkward questions were simply being put straight to one side. Alder’s recent breaches of his own whistleblowing rules, for example, never came up for discussion.
The technology creaked. The livestream completely crashed for a couple of minutes, while those taking part said it had been difficult at times to send in questions online.
One claim caught the eye: one FCA official asserted that British savers had received £4 billion in additional interest “as a result of our actions”. No evidence was given for that implausible boast and no one was there to challenge it, of course.
We learnt a little about the furnishing of the front rooms of FCA non-executive directors who Zoomed in from home (not a good look for part-timers on fees of £45,000, by the way) and chief executive Nikhil Rathi’s taste in gold ties. And not a lot else.
The FCA is in danger of being seen as being guilty of the same sins as the industry it regulates: another unaccountable organisation run by a distant elite that never gets to be troubled by the tiresome problems of the people it is supposed to serve, that never gets to truly feel and understand the heat of their anger and frustration.
The public meeting is not some optional gesture kindly offered by the FCA public relations department. It is an obligation enshrined in the Financial Services and Markets Act.
The regulator’s defence that the online approach is more inclusive doesn’t hold much water. It would be perfectly possible to hold a hybrid meeting, where people could take part remotely along with people in the room.
The irony is that this self-serving approach was unnecessary. Rathi at least has proved himself an empathetic and competent master of his brief when grilled by MPs and is perfectly capable of handling a public stoning.
Thames Water is meandering inexorably towards a restructuring. Thursday’s gruesome five-notch downgrade by the credit rating agencies Standard & Poor’s and Moody’s confirms what bondholders, shareholders and regulators know only too well. The cash is running out fast and the company cannot possibly survive without a massive conversion of a large chunk of its £16 billion of debts into equity, at the very least.
The severity of the haircut to bondholders depends partly on how much Ofwat allows Thames to lift its prices. Thames doesn’t have to end up in a special administrative regime, effectively a kind of temporary nationalisation. But it is essential that ministers prepare the groundwork for an SAR now so that it could. In the gigantic game of brinkmanship that is going to take place in the coming months, it is essential that the threat is a credible one if bondholders are to be sufficiently accommodating.
Investors in Shell and BP are feeling bruised: £12 billion was wiped from their share values amid reports that Riyadh has abandoned hopes of getting $100 a barrel for its crude.
The big swing producer of Opec, Saudi Arabia, is crucial in making the cartel work. If it has really capitulated, the taps could open further. The 2.5 per cent fall in Brent crude to $71 represents a distinct departure from the $80 to $100 range of the past two years.
This is indisputably good news for the wider British economy. The cost of petrol, diesel and heating oil, not to mention plastics and chemicals, is a heavy drag on British consumers and firms. If the latest fall is sustained, it will boost discretionary spending while also reducing inflation and hastening further base rate cuts. The stronger pound is already helping in curbing import costs.
All bets for a lower crude price are off, however, if the horrors in Israel, Gaza and southern Lebanon erupt into a wider conflagration in the region.
A year after Arm Holdings snubbed London in favour of a New York listing, another Cambridge-based technology winner heads into American ownership. Featurespace, which uses artificial intelligence to identify and combat financial fraud, has been sold to the San Francisco-based Visa for about £700 million.
Founded in 2008 and built from the university’s engineering department, Featurespace’s clever software picks out when an account-holder does something out of character, a red flag for fraud. It is used by HSBC and NatWest, among others.
One bit of good news is that the deal frees up a useful £89 million in cash for one backer, Chrysalis Investments, the embattled FTSE 250 investment vehicle, to help it to support other potential unicorns and to provide cash for buybacks.