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Adviser anger over FSA admission that it’s easier to take on the ‘little guys’

FSA Front 480

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.”


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Whilst it’s obvious that the little guys are easier prey for the FSA, the main issue is that the FSA has failed (as it seems to on so many fronts) to rise to the challenge of going after the big guys.

    It’s all very well for Ms. McDermott to say “We often find we start asking questions and no one can tell us who is in charge”, but surely such obfuscation comes into the realm of failing to deal with the regulator in an open and cooperative manner and the institution in question not having a proper system of Senior Management Arrangements, Systems and Controls (SYSC), as laid down in the FSA’s own handbook). It’s all set out in copious detail at

    Perhaps Ms. McDermott needs a refresher course on the subject.

  2. The FSA were running up and down the country, making sure IFAs’ were treating their customers fairly, while the banks were rigging the Libor rates and selling PPI & Interest rate swaps, by the bucket load, to people who had no need of it.
    Nero fiddled while Britain burned.
    As long as regulators can step into a bank job when their stint at canary towers is over, things will continue as before.
    Like the proverbial school bully, it is easier to go after the skinny little kid with no mates than to tackle someone your own size.

  3. The FSA should ownership of the mandate they have as regulator.They shy away from form taking on the Big banks and take months to process applications from ordinary institutions.

    There seems to be an air incompetence and fear.

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