Almost one in ten candidates for senior jobs at banks and other financial services businesses have withdrawn their applications since the Financial Services Authority (FSA) began aggressively vetting senior staff.
Of the 174 executives who have applied for “significant influence functions”, such as chairman or chief executive, since the measures were adopted last October, 15 pulled out before any formal decision was made.
According to information obtained by RPC, the law firm, 12 of the 15 aspiring senior executives dropped their applications after initial interviews in which they were quizzed by the FSA on whether they had the “necessary skills, experience and integrity” for the role.
The interviews are key to a more intrusive stance introduced by Hector Sants, the FSA chief executive, after the bank crisis.
The FSA said: “In a number of cases, applications for senior roles have been withdrawn following interviews that raised questions concerning the candidate’s competence.”
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The figures have raised concerns in the City that the FSA has the power to blackball candidates early on, forcing them to withdraw without the need for the regulator to make a formal assessment and specifically ban individuals.
Jonathan Davies, financial services partner at RPC, said: “There is a concern about how much arm-twisting the FSA is entering into.”
The FSA said: “It is essential that firms have competent boards.”
However, Mr Davies said that companies were unlikely to challenge FSA decisions because, while applications and interviews were private, appeals and their results were public and, if a company was unsuccessful, the FSA would make a public statement identifying the individual and the firm that wanted to hire them.