FSA: It is easier to take on the 'little guys'
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FSA head of enforcement Tracey McDermott has admitted it is easier to go after the “little guy” rather than take on the big banks.
Speaking to the Parliamentary Commission on Banking Standards yesterday, McDermott rejected suggestions that the FSA lacks integrity and is too close to the banks.
PCBS chair Andrew Tyrie asked McDermott whether it is easier for the FSA to go after the “little guys” and McDermott replied: “I would accept it is easier”.
Tyrie slammed the regulator for letting “the big fish swim straight past” FSA rules and acting as a “toothless tiger”. Labour peer Lord John McFall hit out at the regulator for not taking on senior bankers.
McFall said: “You as an organisation have failed to tackle those at the top. You are playing at a middle level and groping around at trying to hold people to account.
“It needs some dramatic statement from the FSA saying ‘we have been missing in the past and captured by the banks and we will do something to demonstrate our independence’. I suggest that the integrity of the FSA has been lacking over PPI or holding people to account.”
McDermott said the FSA has attempted to hold senior staff to account but has been unable to do enough under its rules.
She said: “We have taken action against senior individuals at large firms. It is a relatively small number even though we have worked quite hard. We often find we start asking questions and no one can tell us who is in charge.”
McDermott said there are three obstacles to taking on senior bankers, including the fact that many decisions are made by a committee so finding responsibility can be “difficult”, complex structures mean it is difficult to find out who is in charge and FSA rules mean there is a high evidence threshold to punish individuals.
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Readers' comments (31)
matty | 30 Jan 2013 3:36 pm
This appears to be somewhat out of context, she was answering a deliberately guided question honestly.
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Alan Lakey | 30 Jan 2013 3:36 pm
Don't we know it?
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Anonymous | 30 Jan 2013 3:37 pm
The FSA: It's not their fault. After all, if you are not accountable to anyone then how can you be to blame for anything?
What will the sanction be for the FSA's failure?
A knighthood?
Expenses paid helicopter rides?
A Final Salary pension that none of the saps they leech their fees from can access (and I mean IFAs and their clients)?
Guaranteed jobs in the city they are meant to regulate?
If this isn't a corrupt system, I would ilke to see what one looks like.
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Sam De Zoysa | 30 Jan 2013 3:37 pm
"We often find we start asking questions and no one can tell us who is in charge.”
What is the point of a register of controlled functions if those that take on that responsibility are not held to account? The fact that there is a committee involved is irrelevant. You can delegate authority not responsibility.
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Richard | 30 Jan 2013 3:37 pm
Shocking. But she's just stating what we little guys already knew.
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Ian Coley | 30 Jan 2013 3:38 pm
Oh dear
Not really good enough on any level.
Responsibility = CEO in the absence of anyne else.
Banks and other mega institutions have lots of money so it makes it more worthwhle to go after them than small fry who might just fold at the first ill wind.
Having said that TM isn't saying they do therefore go after small fry more often,just that it is easier (i.e. statement of the obvious - no news)
Ian Coley
Partner
Medical Investment Services
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Persecuted IFA | 30 Jan 2013 3:41 pm
What a disgraceful and shameful admission although we all knew this already. The Law is the law, right is right and wrong is wrong irrespective of the size or financial clout of the offending party.
P.S. wheres Hector.
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Anonymous | 30 Jan 2013 3:41 pm
Can't believe that someone has actually admitted to the fact that the FSA have ignored the actions of the banks? Can't believe this woman is for real As head of enforcement (made up title anyway) I guess there will be another golden farewell payment - blind leading the blind - when will someone in power take this up and punish the real villains? Answer - never of course. She will leave soon I'll bet.
Waste of time and energy.
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Dominic Thomas | 30 Jan 2013 3:42 pm
I wonder what sort of feedback the FSA would have given to those that sold Arch Cru products (etc) had they used a similar line...
Naturally larger organisations have more complex structures and more people involved, but one would assume that this would go to the heart of systems and controls rules, which I though applied to all, irrespective of size or complexity. Certainly it must be harder to regulate a larger organisation, but surely the point being raised is that the amount of resources allocated to small fish is rather daft when considering the damage big fish can do.
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Anonymous | 30 Jan 2013 3:46 pm
"FSA rules mean there is a high evidence threshold to punish individuals.
Unless you are John Calland IFA (little guy harrassed for 10 years by FSA, FSCS & FOS)
Be afraid, be very afraid, unless you work at Barclays.
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