Crisis at the FCA as top regulator Clive Adamson departs
Some of the City’s most senior insurance executives last night expressed their dismay at the departure of Clive Adamson from the Financial Conduct Authority (FCA).
Adamson was widely respected within the industry for being a tough but fair regulator.
The news that he is to step down comes days ahead of the publication of a report on the watchdog’s handling of a botched media briefing on closed book legacy business earlier this year, which resulted in the regulator being publicly reprimanded by chancellor George Osborne.
“It’s been rumoured for a while that he would take the rap for the debacle over the leak,” said a source from one leading insurer last night. “But Clive seemed like the one bit of good sense there is around there.”
Nigel Wilson, chief executive of Legal & General, while not commenting about the circumstances behind Adamson’s departure, praised his professionalism. “Adamson’s departure is a sad day for the FCA. He will be a loss to regulation in the UK. He’s somebody that always listened to what the industry said, but was tough and quick to discuss problems.”
Adamson, director of supervision and a board member at the FCA, has overseen the financial services industry since 2007, when he joined the Financial Services Authority as a senior adviser.
In March, a report in the Telegraph claiming that the FCA was planning an inquiry into 30m pension and investment policies, which named Adamson as the source, wiped billions off the market value of various insurance companies.
In the 24 hours following the botched briefing, Aviva’s share price tumbled by three per cent, L&G’s by 3.5 per cent, and Resolution’s by seven per cent.
Phoenix at one stage saw its shares plunge by 21 per cent.
Last night, two separate sources said they understood that Adamson had not been responsible for the controversial briefing to the media.
George Osborne made his disapproval over the leak known at the time, and wrote to the FCA saying he was “profoundly concerned” by the event.
The regulator later clarified that the review would have a narrower focus. However, Osborne also called on the FCA to explain why its clarification statement was “issued so late” the day after the story was published. The results of an inquiry into the issue, led by Simon Davis, partner at Clifford Chance, are expected next week.
Earlier this year, Adamson was forced to defend his decision to back the appointment of Paul Flowers, disgraced ex-chairman of the Co-op. Adamson admitted to a Treasury Select Committee in January that it was clear in his interview with Flowers in 2010 that he had no banking experience.
Adamson was seen as having more of a relationship of equals with insurance firms than FCA boss Martin Wheatley. Several insurers have expressed disquiet with Wheatley’s trigger-happy approach, made famous by his claim that he would “shoot first and ask questions later” in his role at the regulator.
Sources close to the matter told City PM that a strained relationship existed between Adamson and Wheatley, and added that Adamson had been made to take the fall for the leak fiasco. In the aftermath of that incident, Wheatley faced numerous calls for his resignation and admitted that it was “clearly not the FCA’s finest hour”.
The FCA declined to comment.