UK inquiry into collapse of LCF to interview FCA’s Bailey | News

Thursday, January 23, 2020 10:28 a.m. EST

LONDON (Reuters) – Bank of England governor-designate Andrew Bailey will be interviewed about his supervision of collapsed investment firm London Capital & Finance, an independent inquiry said on Thursday.

LCF collapsed in January 2019, leaving 11,600 bondholders nursing losses of up to 237 million pounds. It was selling “mini-bonds” that raise cash for small firms.

The bonds were not regulated by the Financial Conduct Authority, which Bailey heads, but LCF itself and marketing material were.

Elizabeth Gloster, a barrister selected to head the inquiry, said the process of gathering documents for her investigation was nearing completion and the next stage was to interview officials at the FCA.

Gloster told a meeting of about 100 bondholders that Bailey has been chief executive of the watchdog for almost all of the period that LCF was authorized.

Bailey is due to take up his new post as governor of the Bank of England in March.

“We will be interviewing Mr Bailey,” Gloster said.

Gloster said efforts to gather documents on LCF from the FCA had met with an “unexpected delay”, but her report is expected to be delivered on time in July.

Meeting the July deadline relies on outstanding information being provided by the FCA in timely fashion, Gloster said, adding that there would be no interim report as this could distract from the conclusions of the final report.

The FCA declined to comment.

(Reporting by Huw Jones; Editing by Kirsten Donovan)

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