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Over-confidence is a still a risk in the City, says new FCA chief 

May 11, 2016

Jill Treanor, The Guardian

Andrew Bailey, the incoming head of the Financial Conduct Authority, said improving the culture of City firms is a priority and that “hubris” needs to be added to the list of risks firms face.

Giving his last speech as a deputy governor of the Bank of England before taking up his role at the FCA, Bailey pointed to the over-confidence of the management at major banks as a cause for the taxpayer bailouts and billion of pounds in fines for misconduct in recent years.

“We talk often about credit risk, market risk, liquidity risk, conduct risk in its several forms. You can add to that, hubris risk, the risk of blinding over-confidence ... It is a risk that can be magnified by broader social attitudes,” Bailey told delegates at the City Week conference on Monday.

Even so, he said the City was not being given enough credit for changes in behaviour since the financial crisis.

“Ten years ago there was considerable reverence towards, and little questioning of, the ability of banks and bankers to make money or of whether boards demonstrated a sufficient diversity of view and outlook to sustain challenge. How things have changed,” he added. Read more

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