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MPs attack FSA over failure to tackle big banks

by Brian Cantwell on Jan 31, 2013 at 08:29

MPs attack FSA over failure to tackle big banks

The Financial Services Authority’s (FSA) head of enforcement Tracey McDermott came under fire from MPs yesterday for failing to tackle big banks and instead picking on smaller financial firms.

MPs on the Parliamentary Commission on Banking Standards accused the FSA of being too close to the big banks and said it was not effective at regulating those at the top.

McDermott (pictured) accepted that the regulator struggled to target those high up, and conceded that it was easier to bring enforcement against smaller firms.

'In relation to the large institutions it has proved extremely difficult to get at the people at the top,’ she said.

‘[With small firms] the evidence is much easier. I would accept it is easier.'

John McFall asked McDermott why no one at from a bank had been charged in relation to payment protection insurance mis-selling.

McDermott said the FSA had not been as effective at holding people to account in the past and this was something it had to learn to do better.

12 comments so far. Why not have your say?

Julian Stevens

Jan 31, 2013 at 09:24

An admission at last from the FSA that it's concentrated its firepower completely disproportionately on the little guys who pose relatively small risks of consumer detriment (no, we're not perfect) and who don't have the resources to fight back, because we're easier targets to add to the FSA's list of scalps. A pretty sorry and depressing state of affairs after nearly 25 years of regulation

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Richard Hardy

Jan 31, 2013 at 10:13

"McDermott said the FSA had not been as effective at holding people to account in the past and this was something it had to learn to do better".

"In relation to the large institutions it has proved extremely difficult to get at the people at the top,’ she said".

For hundreds of millions of pounds a year they didn't even know who were the top people in the industry they are supposed to be regulating!

Hector Sants will have known as he ended up being employed by them.

Unbelievable! You can't make it up!

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Jan 31, 2013 at 10:31

This isnt an admission its an honest answer, if someone asked you what was eaiser, hunting mice or wild boar, Im sure you would say mice too. Of course its easier to tackle smaller problems, the clue is in the description! This is this problem when politics enters the business world.

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Alistair Hinton

Jan 31, 2013 at 10:56

The point at issue here is surely not merely about the difference between tackling small problems and dealing with large ones but the fact that FSA is and was charged with the responsibility to deal with the large ones concerned and it should be a reasonable assumption that its immense and ever-increasing annual budget enabled it to secure sufficient and sufficiently tenacious expertise within its organisation as to ensure the wholesale rooting out of the sources of those problems and the full use of its powers to deal with those problems effectively and sustainably.

The fact that this has not happened in timely manner and that even what has just recently been accomplished by FSA is far too little far too late is especially galling when a far from inconsiderable proportion of its senior staff (not just Mr Sants by any means) came to FSA from a background in banking.

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Steve Holloway

Jan 31, 2013 at 11:23

And they expect us to have confidence in a regulator that allows thieves and robbers of high profile such as banks get away with their crimes scott free. Then this stupid Government awards its head with a Knighthood for allowing the banks the freedom to rip off its clients, if it was not so serious you could laugh! These are supposed to be educated people with a sense of right and wrong.

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complacency rules

Jan 31, 2013 at 11:29

Well at last an admission from the FSA of something that we all already knew. However, it is refreshing to havae thislevel of frankness and it clearly shows that the FSA were too close to the banks probably because the banks were to be their next employers.

With regard to charges for PPI mis-selling (and all the other bad practices) does the statute of limitations apply, and if so has it been exceeded? If it has not then it is not too late to start prosecutions. Not sure where the responsibility lies for starting prosecutions but surely someone in authority should assume ownership and get on with it.

This is also supports all those who have protested against Hector's knighthood. the case for this is becoming undermined with every passing day. This has smelled from day one and the stench is getting stronger and stronger. With all the outrage expressed over this why has someone in government not commented on this?

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John Burchett

Jan 31, 2013 at 11:29

You cannot regulate when you spend so much time back slapping at social events.

Make socialising with the people they regulate illegal and that may make the regulators more focused and objective.

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Derek Guyers

Jan 31, 2013 at 11:40

This is what the FSA says at the end of its Press Releases:

"The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system."

It appears that, in regard to Banks, it’s missed three of its four objectives.

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The FSA Fan Club

Jan 31, 2013 at 11:41

Those MP's aren't fools are they. They've finally spotted that the FSA is, and always has been, set up by the banks, for the banks, with the sole intention of wiping out their competition.

They have managed to regulate absolutely nothing of use and always always look the other way when something serious is happening - while, all the time lining their own pockets with absolutely obscene salaries, and an unbelievably generous/wholly unaffordable pension scheme what we are all now bailing out - note, not the banks!

Rats and sinking ships comes to mind at present.

I just hope that somehwere down the line, that these muppets are well and truly hung out to dry for their gross incompetence, and the closed shop gravy train that they operated for far too long.

Anyway - thank God for our MP's

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Knowledgable insider

Jan 31, 2013 at 12:23

Of course the top FSA people are not going after the Banks...as they will eventually be repaid by generous jobs as Sants has been for his merky role in protecting them and going after the IFA sector where the chances of well paid jobs for retiring FSA officials are unlikely. The Government is 100% to blame for this as ultimately they are the masters here and are the organ grinders to the FSA monkey.

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David IFA

Jan 31, 2013 at 16:14

You see the Banks pay the fines (& in some instances the Tax payer) so it dosn,t hurt the Banks, because the profits outweigh the fines. What needs to happen is for the Regulator for once to do its job properly and take away the permissions at the top of the heads of the Banks ie make heads role. This is the only way to hurt them.

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Super Moses via mobile

Jan 31, 2013 at 21:04

Shame on them all. Not fit for purpose

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