The governor of the Bank of England has told MPs that he takes responsibility for regulatory failings over the £237m London Capital & Finance investment scandal, and that he wished he could have spared the “suffering” of those who lost money. Andrew Bailey, who was formerly the chief executive of the Financial Conduct Authority (FCA), also revealed that he did not know about LC&F “until pretty much the point it was closed down” by the City regulator. Bailey, who took over as th Bank governor in March 2020, was being questioned by MPs a week after the head of an independent inquiry into the matter said the Treasury needed to consider whether Bailey should face “consequences” over the FCA’s failure to properly regulate the firm before it went under. More than 11,600 people had invested a total of £237m when LC&F collapsed in January 2019. Its “mini-bonds” had promised returns to investors of up to 8% a year. Just before Christmas an inquiry led by Dame Elizabeth Gloster, a former high court judge, concluded that the FCA failed to properly supervise and regulate LC&F. During the second in a series of evidence sessions on the LC&F scandal, MPs on the Treasury select committee put it to Bailey that Gloster’s findings about the FCA were “very damning”, and asked which failings he took personal responsibility for. Bailey replied: “I actually take responsibility for all of the FCA, for the entirety of the FCA – there’s no question about that … So I don’t want to in any sense suggest I’m not responsible for everything that happened at the FCA. I am.” He added: “There are a lot of lessons for all of us.” Bailey was later asked about “one thing that you could have done differently”. He replied: “Straightforwardly, I would have wished that we could have saved the bondholders the suffering that they have had. There’s no question of that – it’s why I structured my apology as I did.” Bailey was the chief executive of the FCA from July 2016 until March 2020. He told the MPs: “I didn’t know about LC&F as a firm until pretty much the point it was closed down by the FCA. So my personal involvement didn’t begin until then.” Bailey also highlighted problems relating to the regulator’s call centre, which received just over 600 calls about LC&F, some pointing to “suspected fraud”. These included 15 from one individual voicing detailed concerns. However, the call centre was receiving about 200,000 calls a year, he said. “The red flags were buried in the 200,000 calls … There was no proper system for extracting that information.” Bailey said that there “should have been a mechanism to alert supervision and enforcement” to those. The call centre problems were exacerbated by “very high” staff turnover and quite high staff sickness rates. Bailey said one of the reasons for this was “the abuse that staff were taking”. He added: “They put together a tape for us … that tape is highly disturbing, and it was happening with some frequency. The tape had in it racial abuse, antisemitic abuse, homophobic abuse.” Bailey said: “I have to hold my hand up – I wish I’d known about it sooner. I have to be honest with you, yes, I wish I’d known about it sooner because … I would have jumped in and got on it sooner.” The government-backed Gloster investigation’s report identified “significant gaps and weaknesses” in the regulator’s policies and practices, and stated that “responsibility for the failure in respect of the FCA’s approach to its perimeter rests with ExCo [the FCA’s executive committee] and Mr Bailey”.