In response to a question from Treasury Select Committee sub-chairman Michael Fallon, chief executive Hector Sants admitted bonuses had not been cut to reflect self-confessed shortcomings.
Sants said: “We paid the same percentage of salaries as bonuses to employees of the FSA for 07/08 as we did the previous year. It was the same for the two years in question – a decision that was made by the board on the recommendation of the executives.”
Fallon also questioned why none of the FSA’s 2,600 staff had been sacked in the wake of the Northern Rock debacle.
He said: “The report you’ve done lists a catalogue of failure. You identify a lack of sufficient supervision, a lack of adequate oversight, a lack of sufficient resources for supervising firms and a lack of intensity from the FSA. Sir Callum don’t you think it would have been an acknowledgement of the extent to which you recognise the failures in Northern Rock and the confidence you want to give everybody in claiming new powers, if at least one person had been dismissed?”
McCarthy said: “There have been various people who’ve left the FSA, some through mutual agreement and there are various people who’ve been moved. The people who were responsible for Northern Rock at the relevant period none is now responsible for supervison and a number of them have left the FSA.”
I find the FSA’s lack of common decency and understanding towards adviser firms outrageous…but to add insult to injury..bonus? Why would you pay a bonus to anyone in a government department that only exists to regulate? Is it therefore not the case that an individual in such an environment would feel the need to get results to achieve their bonus? This smacks of “do as I say but not as I do” and comparisons can be drawn here against commission. I am sure if challenged that this draconian regulator will still gets its way. I would welcome a move to have the FSA regulated by a large majority of IFAs. You never know they may actually be able to make it work properly and even save a bit of money! Food for thought.
Dave Alan Financial Services
I am wondering if the people who have been moved were moved to higher paid jobs within the FSA, and just exactly how many of the staff involved in Northern Rock have been disciplined in anyway of left?
If they have left to seek other employment did there references reflect their part in Northern Rock?
Clearly one set of rules for the FSA and a different set for anybody else.
I am not pleased to see the huge fees that I pay used in such a way.