Advisers have reacted with anger to the FSA’s admission it is easier for the regulator to go after the “little guys” rather than big banks.
Speaking to the Parliamentary Commission on Banking Standards last week, FSA head of enforcement Tracey 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 a lot 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 “lacking integrity” by not taking on senior bankers.
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 often find we start asking questions and no one can tell us who is in charge.”
McDermott added many decisions are made by committees so finding responsibility can be “difficult”, complex structures make it difficult to find out who is in charge and FSA rules mean there is a high evidence threshold to punish individuals.
Jacksons Wealth Management managing director Pete Matthew says: “We all pay our share of the levies and I would be far happier seeing the FSA taking the banks to the cleaners when it is right do so rather than the path of least resistance it seems to take.
“We do not need a lazy regulator. Just because it is easier to take on small firms does not make it right.”
Chelsea Financial Services managing director Darius McDermott says: “Size should have no impact on the regulator’s ability to seek retribution and fines where appropriate.”