Challengers banks want watchdog to focus on competition, not fines, and let the sector get back to lending

The next boss of the City watchdog should draw a line under the huge costs of PPI and other scandals, and let the banking sector get back to growing, according to the boss of Virgin Money. Jayne-Anne Gadhia wants whoever replaces ousted Financial Conduct Authority boss Martin Wheatley to bring an end to the long-running flood of fines and compensation costs. “It is unfortunate that the PPI costs continue to roll as they do, and I think that has taken capital out of the system. People should be held accountable for the problems of the past, although I do think [those costs] should probably be capped,” she said.

Virgin Money does not have the same PPI costs as the bigger banks, making this a generous suggestion as it would help Ms Gadhia’s competitors. “I do think banks should be held to account for the sins of the past, but in a controlled, limited way. It is important to have a strong banking system for all of us,” she said. Previous attempts have been made by banks to implement a hard deadline on PPI compensation claims, in a failed attempt to bring an end to the flood of costs, which have so far totalled more than £25bn. Just this week Lloyds set aside another £1.4bn for PPI costs. Paul Pester, chief of TSB, wants the FCA to put as much effort into promoting competition as it does into punishing bad behaviour......Read more here