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FCA to review enforcement approach

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The FSA says the Financial Conduct Authority will review its approach to enforcement action following MPs’ calls for a more flexible system of fines with much bigger penalties for firms and individuals that do not cooperate.

A Treasury select committee report into Libor rigging recommended the FSA introduce greater flexibility around fines, with much heavier fines for firms or individuals that do not co-operate and smaller ones for those that do.

In its response to the report, published today, the FSA says it already has substantial discounts for firms that co-operate. It adds it introduced a new penalties policy in 2010 to provide greater transparency on the fines it imposes.

The regulator says: “As we take on more cases where the new policy applies, we will consider on an ongoing basis how well the policy is working in practice and whether it needs amending.

“Our overall approach to enforcement and penalties will also be subject to early consideration by the FCA board to ensure it is satisfied with the approach.”

The FSA points out that Barclays received a 30 per cent discount on its fine for Libor rigging, reducing it from £85m to £59.5m, because it highlighted its own wrongdoing to the regulator.

It also outlined new procedures for whistleblowers in smaller firms and has introduced a new IT structure to better manage and respond to them.

The regulator says it has not yet completed its own internal review into its awareness of Libor rigging and effectiveness in dealing with it, but it will report back to MPs when it does.

Conservative MP and TSC chair Andrew Tyrie says: “The systemic rigging of important rates appears to have been pervasive in the banking industry over a long period of time.

“Serious regulatory shortcomings also came to light. It is only right that the FSA has had to shoulder its share of the blame for this scandal.

“Following the Treasury committee’s inquiry, significant steps have been taken to reform Libor as well as to reform the culture and practices within our banks and regulators.

“We must have more confidence that such behaviour will not happen again. Much work remains to be done. The welcome adoption of judgement-led regulation can help”


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. So Barclays got a 30% reduction.
    Seems a Hec of a reduction, similar to othe Barclays fines that look to be Hectored

  2. Better regulation would flow from independent governance and accountability.

    At present these people are entirely unaccountable. They do not enjoy any form of external scrutiny. Is it any wonder it is a failed proposition constantly trying to catch up or dictate?

    Bad Law!

  3. They got a 30% discount for highlighting its own wrong doing… Excuse me and they would have done this if the Libor scandal was still going on un-noticed? Yeah right. These people use sledgehammers to crack wallnuts where IFA’s are concerned but will not go after the big guys with the same vigour. If they did the world would be a better place for it.

  4. Barclays fine reduced by £25.5 million for highlighting its own wrongdoing ?

    OR ?

    Was this just inside information ?

    Looks like the 3 million or so salary to Sants was good value !!!

    Ethics ? do the FSA even know how to spell it ? let us not forget the FSA started to review LIBOR fixing way back in 2008.

  5. Incompetent regulators 21st February 2013 at 9:37 am

    What about accountability within the regulators for cock ups?

  6. Roman Duzinkewycz 21st February 2013 at 10:08 am

    Accountability and FSA in the same sentence – get real old bean.

  7. RegulatorSaurusRex 21st February 2013 at 11:28 am

    I’m sure their customers appreciated the discount, it is they who pay whether it is at point of sale or point of fine.

    I thought the ‘new and improved’ regulator was going to get tough on the cause of complaints instead of tinkering with the imponderable method of calculating the fines, the point, fine, ban regulation of yesteryear continues apace but the ban element only applies to the smaller fish in the barrel.

    More of the same old same old…. no balance whatsoever.

  8. With the ever decreasing authorised adviser number along with the resulting reduction of income for the FSA and the fact that the revenue from Fines will now be kept by the Treasury, the future FSA/PRA fees will be large enough to appear to be punitive for the Firms left standing. The only organisation that seems to be growing its numbers and costs a in financial services is our Regulator. Any ideas where they are going to find the shortfall…. Be afraid be very afraid. It is not bad advice that is driving IFA’s out on business it is bad regulation and within a couple of years unsustainable regulatory burden.

  9. The regulator is not only responsible for fining individuals/companies who are authorised and regulated they should also be checking on those who are not.

    How many people who are operating in the UK without authorisation – if you do a simple search for financial adviser you will get a number of lead generation companies who are not authorised and regulated – surely this is the job of the regulator to clamp down on these activities.

  10. The FSA’s early settlement discount isn’t really anything of the sort. Rather, it’s an unchallengeable threat that if you don’t throw in the towel, give up on any further attempts to defend your position and pay up quickly without further ado, they’ll increase the fine by 43%. A fine is a fine, not something on which the FSA should be able to lean on the subject to cough up quickly under threat of being bashed even harder if they don’t.

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