LONDON: More than one in 10 people picked for the top jobs in British finance pull out during a regulatory vetting process, which has got tougher since the financial crisis.
People put forward for chief executive, chairman and for a handful of other senior roles in banking now face a more gruelling interview by British financial watchdogs.
This increased scrutiny also follows weaknesses in vetting exposed by problems at the Co-Op Bank, where the former chairman, Paul Flowers, was waved through in 2010 despite disclosing a criminal conviction and later showing little knowledge of banking.
The country’s two financial regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), have not rejected any candidates since the watchdogs were set up in April 2013.
But 22 people have withdrawn out of 186 applications that were processed for the most senior positions, based on freedom of information data provided to Reuters and published data.
Rejections are rare because the regulators will notify prospective employers if candidates fall short of requirements, which will typically prompt the person to withdraw before they are interviewed for fear that failure will stall their career.
“For some people it can be their first exposure to the UK regulators, and it can be a challenging experience,” said Sam Tymms, managing director at Promontory, which advises financial firms on regulatory and compliance matters.
“If they are not granted approval they can’t take the role and that can have career implications.”
People who have been through the 90-minute interviews conducted by the two watchdogs have described them as challenging, intense and uncomfortable.
“I knew that getting my job depended on getting through it. It’s funny how that can focus the mind,” one senior executive said.
Once a bank, insurer, hedge fund or other financial firm picks who it wants for a senior role, it puts the candidate forward for regulatory approval.
The interview is typically with three to seven people from either the PRA and FCA, or both.
Interviews, also held for senior finance, risk, compliance and audit roles, have become more forward looking with more focus on culture and conduct, sources familiar with the process said.
Topics are wide-ranging, and candidates will also be grilled on strategy, leadership, markets, regulation, risk, capital, tax, technology and cyber security. — Reuters