Financial Conduct Authority (FCA) chief executive Nikhil Rathi has defended the appointment of Megan Butler as executive director of its new supervision and policy divisions.
Butler was previously head of supervision at the City watchdog and her department was criticised for ignoring and missing failings by collapsed mini-bonds provider London Capital & Finance.
Speaking to a Treasury committee inquiry into the FCA’s regulation of London Capital & Finance, Rathi (pictured) said he wanted to ensure continuity during challenging times.
“Megan was the best candidate,” Rathi (pictured) told MPs.
“She recognises mistakes have been made and is committed to working to resolve them
“There is an understanding that mistakes had been made and an openness to address them.
“That’s the basis on which Megan was interviewed.”
Rathi said Butler brought three decades of experience to the role that was hard to find elsewhere.
Following the collapse of the mini-bond provider, Dame Elizabeth Gloster chaired an investigation into the FCA, which highlighted several regulatory failings.
The supervision and authorisation departments were responsible for regulating LCF promotions, despite mini bonds being unregulated, and were accused in the report of failing to act on warnings of wrongdoing.
Butler was named in the report alongside former FCA chief executive Andrew Bailey and executive director of supervision, retail and authorisations, Jonathan Davidson.
Bailey has since become governor of the Bank of England and Davidson has moved to a role as senior adviser to the FCA on climate change.
Meanwhile, Butler has been appointed to lead a newly-merged policy and supervision department.
MPs also raised whether regulatory statements by firms need to be more detailed so investors understand what they are putting money into.
FCA chair Charles Randell admitted to MPs that it needs to be clearer to consumers whether firms’ activities are regulated or not.