Last week saw an information leak by the Financial Conduct Authority (FCA) that revealed planned investigations into the insurance industry. The leaked information led to a reported £6 billion being wiped off the share prices of the largest insurance firms in the UK.
Chancellor George Osborne reportedly told the FCA that they should consider serious disciplinary action against the staff regarding the leak. The FCA had planned to reveal their plans a few days later, but the impromptu information spill forced them to bring their announcement forward.
This botched announcement predictably did not impress Osborne, who wrote in a letter from the treasury to the FCA: “These events go to the heart of the FCA’s responsibility for the integrity and good order of UK financial markets, and have been damaging both to the FCA as an institution and to the UK’s reputation for regulatory stability and competence.”
John Griffith-Jones, the chairman of the FCA replied that he and the FCA share those concerns and will “do everything possible to address that harm by setting up an independent inquiry.”
The investigation that is the route of all the trouble was into the treatment of long standing customers involved in a “zombie funds”, life insurance schemes that are closed to new customers and rely on an existing customer bank.