UK lawmakers ask BoE's Bailey to clarify 'apparent contradictions' over LCF

FILE PHOTO: Bank of England Governor Andrew Bailey poses for a photograph on the first day of his new role at the Central Bank in London, Britain March 16, 2020. Tolga Akmen/Pool via REUTERS

LONDON (Reuters) – Bank of England Governor Andrew Bailey must clarify “apparent contradictions” in evidence he gave to a parliamentary enquiry about his role in the collapse of investment group London Capital & Finance, lawmakers said on Tuesday.

Bailey gave evidence to parliament’s Treasury Committee on Feb. 8 about the collapse of LCF in 2019 while he headed the Financial Conduct Authority, which had received heavy criticism in a report by former judge Elizabeth Gloster.

More than 11,000 investors lost up to 237 million pounds ($329 million) from the collapse.

Gloster said long-term problems with the FCA which pre-existed Bailey’s tenure as chief executive were not an excuse for having failed to do more to warn investors about LCF.

Gloster subsequently disagreed with Bailey’s account to parliament of a dispute between them over whether regulators should be held personally responsible or culpable in her report, as well as a range of other issues.

The committee asked Bailey to “clarify the apparent contradictions between the evidence you gave and Dame Elizabeth’s account”, and set a March 22 deadline for a reply.

Issues under dispute include the volume of complaints which the FCA had to handle and the use of the term “broken machine” to describe the FCA, which Bailey said had first been used by Gloster, but Gloster said was first used by Bailey.

The Bank of England did not have an immediate comment about the committee’s request.

($1 = 0.7196 pounds)

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