Exclusive: New UK financial regulators face surge in staff turnover

Tue Nov 12, 2013 1:03am EST
 
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By Steve Slater

LONDON (Reuters) - Staff have been quitting Britain's financial watchdogs at nearly twice the rate since they were split into two bodies this year, data seen by Reuters shows, at a time when experts warn of a regulatory brain drain in Europe's biggest financial hub.

Britain broke its financial regulator up into two separate agencies in April to ensure stricter scrutiny of banks and markets in the wake of the 2007-09 financial crisis and a series of costly scandals involving bankers' misdeeds.

But the rate of resignations has nearly doubled at both the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), the two bodies that replaced the Financial Services Authority on April 1.

That raises concerns about the new bodies' ability to retain staff capable of carrying out tougher, more interventionist regulation.

"It's a concern for regulators and they will continue to see a tremendous amount of pressure on keeping their employees," said Etay Katz, regulatory partner at law firm Allen & Overy.

According to data provided by the two bodies under Freedom of Information Act requests by Reuters, staff have been leaving the FCA since its formation at an annualized rate of 12 percent and the PRA at a rate of 11 percent.

The FCA provided data covering its first six months through the end of September and the PRA provided data for its first five months through the end of August.

By contrast, staff turnover in the final year of the now-defunct FSA was 6.9 percent. It averaged 7.8 percent turnover per year for the past five years.   Continued...