MPs planning to further question FCA on decision to drop banking 'culture' review

The Financial Times said that the committee would discuss the matter on 6 January, at its first meeting since news that the review had been dropped was published by the paper. Members of the committee including Scottish National Party MP George Kerevan and the Conservative Party's Mark Garnier have criticised the announcement in the press over the past week.

In a statement, the FCA said that work to improve the culture of financial services firms "remains a priority".

"There is currently extensive ongoing work in this area within firms and externally," it said. "We have decided that the best way to support these efforts is to engage individually with firms to encourage their delivery of cultural change as well as supporting the other initiatives outside the FCA."

The regulator said that it would conduct a "thematic review" of "whether culture change programmes in retail and wholesale banks are driving the right behaviour" as part of its business plan for financial year 2015/16. Its planned review would have focused on "remuneration, appraisal and promotion decisions of middle management, as well as how concerns are reported and acted on", according to the document.

"The decision to drop the thematic review does not mean that banks can be any less focused on cultural change - it is clearly an important FCA theme and will remain so," said financial regulation expert David Heffron of Pinsent Masons, the law firm behind Out-Law.com.

"A firm's culture is individual to it. Each will therefore have different issues and need to find ways of embedding change that works for it. Although this makes comparisons difficult, the stated aims of the FCA's review - to understand whether culture change programmes are driving the right behaviour - should have been met. Clearly, the FCA has determined that engagement with individual firms is the best way of encouraging the delivery of the required cultural change," he said.