View more on these topics

Hector Sants warns banks to improve mis-pricing checks

The FSA has warned banks and investment firms to improve checks to prevent mis-pricing of trading positions and to stop cutting back on staff who work in valuation control functions.

Chief executive Hector Sants wrote to CEOs last Wednesday warning that current market conditions increase the valuation challenges and risks faced by banks and investment firms. He says a “large number” of material mis-marking incidents have recently occurred.

Sants also called for firms to “carefully consider” any headcount reductions that will affect valuation control functions.

Sants says: “Our close and continuous review work over the last 12 months has shown that firms’ valuation processes and controls have become increasingly stretched and in some cases have proven to be materially flawed or inadequate.”

Weaknesses identified by the regulator include inadequate checks on traders by senior front office staff, product control staff not challenging the trading floor and poor technology for verifying prices.

The letter was sent on the same day that Credit Suisse was fined for failing to prevent traders deliberately mis-pricing assets.

The regulator says it will conduct checks in the first half of 2009 to make sure firms have improved their systems.


I was thanked by the lender that undercut me

I recently received an email from Woolwich thanking me for some recent cases which I have submitted to them. I quote: “We wanted to take this opportunity to thank you for your business over the last six months, an unprecedented period for all of us continuing to trade in the mortgage market.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm