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Banks count £160m cost of FSA-ordered redress
by Daniel Grote on Jan 03, 2012 at 07:30
The Financial Services Authority (FSA) ordered banks to pay more than £160 million in redress to customers in 2011, dwarfing the previous year's figure and marking a shift in the regulator's approach to large financial groups.
The £160 million figure marks a huge increase from the £62 million in redress ordered by the FSA in 2010. Fines levied by the regulator declined from £89 million in 2010 to £66 million in 2011.
Analysis from the Financial Times has shown that during 2011, the FSA has mounted a tougher crackdown on larger companies during 2011, with the average market capitalisation of companies fined rising 32% during 2011 to £31 billion.
'We have had some significant retail fines against... big firms that should know better,' FSA acting enforcement director Tracey McDermott (pictured) told the paper. 'The big players have the potential to damage larger swathes of the community than the small firms.'
Calculations from law firm Reynolds Porter Chamberlain (RPC) have also shown that the regulator has adopted a tougher stance on individuals, with average penalties more than doubling between 2010 and 2011, and total fines rising from £8.8 million in 2010 to £10.5 million last year.
'The FSA is targeting high-profile individuals in hard-to-prosecute cases,' RPC partner Richard Burger told the paper. 'The figures show that the focus of the FSA's enforcement strategy is to bring regulatory issues closer to home for company directors and other approved persons.'
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2 comments so far. Why not have your say?
Julian Stevens
Jan 03, 2012 at 08:00
'The big players have the potential to damage larger swathes of the community than the small firms.'
Yes, we've been trying to tell the FSA that for the past 15 years. Why has it taken so long for the FSA to accept that fact and act accordingly instead of beating the life out of small intermdiaries who, although not perfect, represent by quite a large margin the smallest regulatory risk of all and whom all the data ~ not least consumer surveys ~ tells us are the most trusted source of financial advice?
Does this herald a redirection of the FSA's regulatory focus or will Adair Turner continue to demand ever more powers and money so that the FSA can continue to kick the little guys as well as kicking the big players? After all, in its report into the RBS debacle, the FSA admitted to having misprioritised the application of its resources so, in theory, IFA's should reasonably be entitled to ask for some respite, should they not?
report thisCharles Rickards
Jan 03, 2012 at 10:08
Happy New Year Julian, like the sentiment, but........!
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