The Financial Conduct Authority says it has heard “credible reports” of banks using their position as lenders to strong-arm companies into giving them lucrative equity-raising work — and has written to CEOs to stamp out the practice.

In a “dear CEO” letter released on 28 April, the the UK’s market regulator said it had “heard reports that banks may have used their lending relationship to exert pressure on corporate clients to secure roles on equity mandates that the issuer would not otherwise appoint them to. In some cases, these roles may be ‘in name only’, with few or no additional services being provided”.