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FCA to review soaring level of fines

The FCA is to review its fines policy after the level of financial penalties imposed by the regulator has more than tripled in a year.

The FT reports the FCA has handed out a record £1.4bn in fines since April, more than triple the £425m levied in the whole of the 2013/14 financial year.

The increase is largely down to the £1.1bn in fines imposed on five banks last month for attempts to rig the foreign exchange market.

Fines have also increased because a new penalty regime, which allows for higher fines for wrongdoing found since 2010, is taking effect.

Speaking at the regulator’s enforcement conference last week, FCA director of enforcement strategy Georgina Philippou said: “This is not a penalties race. We are not competing against any other regulator in the world.”

She said the FCA will review how well the new regime is working: “We believe that we now have enough cases to pause and take stock and we plan to start a review of our penalty policy in the next financial year.”

The current regime gives the FCA the discretion to increase fines to act as a deterrent. It explicitly increased fines on banks in the forex probe because it ruled they had not learnt key lessons from the earlier Libor investigation.


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

  1. I despise the the banks with a passion however for the regulator to say “……increased fines on banks in the forex probe because it ruled they had not learnt key lessons from the earlier Libor investigation” is ludicrous. These scandals were going on at the same time and had been for a long time. This statement would make you think that these issues were donkeys years apart but they weren’t. They had been running in tandem and only the duration of the FCA review separated the issues by time. Fine them hugely test but don’t try justifying it with ridiculous statements

  2. It’s tripled because of the Forex fines – other than that it’s roughly the same as the previous year. I’ll send my invoice to you for £200,000 + VAT for the report Mr FCA. Pleasure doing business with you.

  3. The banks can do what they want Marty, they have the power in the UK, not the Regulator.

    As long as they keep paying the fines everyone’s happy apparently

  4. Fines on large quoted companies are pointless; you are fining the shareholders – this is often (directly or indirectly) the very people who suffered from the bad advice so you are hitting them twice.

    Identify the people who made the bad calls, stop them hiding behind the corporate shield and fine them…..with no longstop…

  5. Christian Patricot 8th December 2014 at 11:48 am

    Banks made mistakes because people make mistakes, people get greedy. Two factors occured: management believed their own hype (and earned obscene amounts of bonusses and share options) and the overblown, overpaid, over arrogant and mostly useless regulators who failed to do their job in the first place and brought this country (as they did in the US) to the biggest economic meltdown ever experienced.

    So I am not absolving the banks but we should not forget that “hating” the banks or keep fining them ever greater sums seemingly to show you are doing your job and the size of your reproductive organs does not help the millions whose investments are directly or indirectly linked to the share price and dividends paid by banks. When bank share prices get hammered, normally the main index fall so everyone loses.

  6. Funny how this taking stock of fines levels co-in
    cides with Osborne wanting to take fines as tax for things like NHS funding.

  7. from recent statements by the Government saying that they are keen to use Bank fines to pay for essential UK public services..that then follows that in order to keep funding essential services the Government is going to seek new ways to keep fining the Banks

  8. Christian Patricot 8th December 2014 at 1:27 pm

    Tough I hope Mr Osborne will reflect that if he sells OUR remaining Lloyds shares he will get in a few billions at a healthy profit and RBS having been bought for the equivalent of 505p, he is not too far at today’s prices from being able to reap in a few more billions if he wanted to. He could also instruct the regulators to allow Lloyds to restart paying a dividend.

    So he could raise money for Gvt spending and at the same time make millions of people better off. I am not suggesting there should never be fines but fines can only mean less for dividends, bad for share prices and therefore pension and ISA investors and bad for the employees’ salary: no one wins. Name, shame and fine the directors and board members.

  9. Yes, don’t fine them, ban key players them from working in the lucrative banking sector.

    By key players I mean those that undertook the act, those that sanctioned it those that should have been monitoring the activities to spot this earlier.

    After all the FCA is now just a tax raising arm of the Government.

  10. Fining doesn’t won’t can’t work. If it was one bank only being fined it might work but It does seem to be all of them. It does look good on a press release though if the people reading it don’t understand that as an end user they will either have to pay more or have less choice.

    I think if you go after the people responsible and don’t let them work in financial services anymore that would work over time.

    The big thing I think that has to be addressed is regulators should not be exempt from legal action if found incompetent. The current regime is too one sided and if you give a person or an organisation too much power where they can’t either be voted out disbanded held to account personally or corporately we all know what happens.

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