UK watchdog's fines hit record high

4 January 2011

British banking industry watchdog the Financial Services Authority (FSA) has revealed that the fines it imposed in 2010 totalled nearly three times as much as 2009's figure, ahead of plans to strip the body of its powers.

Figures released by the organisation this week revealed that it dished out fines of £89 million ($138.2 million) this year, as the fallout from the 2008 financial crisis and subsequent recession continued to impact some of the country's largest firms.

JPMorgan and Goldman Sachs were hit by two of the biggest punishments in the FSA's history, while 60 individuals were barred from working in financial services - again a slight increase on the number of people banned in 2009.

Following the election of the Conservative-Liberal Democrat coalition government, it was announced the FSA - established in its current form by the previous Labour administration in 2001 - will make way for a newly-formed group and the country's central bank.

Current FSA chief executive Hector Sants agreed in July to oversee the dismantling of the group, which will be replaced both by the Consumer Protection and Markets Authority (CPMA) and the Bank of England (BoE), which will oversee banking regulation.

The CPMA will assume responsibility for battling financial crime, ensuring companies and individuals act lawfully, while Mr Sants is poised to become chief of the BoE's Prudential Regulatory Authority.

FSA head of enforcement Margaret Cole - hotly-tipped to head up the CPMA when it comes into being - said the watchdog remains "committed to keeping the markets clean and trustworthy", but warned there is "still a lot to do".

Earlier this month, Jonathan Davies of London law firm Reynolds Porter Chamberlain claimed the FSA had been looking to impress its new "political masters", but expressed concern that excessive punitive measures could damage the UK financial industry.

By Asim Shah

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