UK FCA Hopes Fines Will Have Impact on Banking Behaviour

The City watchdog has hit financial firms with nearly £1.5bn of penalties so far this year – more than three times the record level of fines it levied in 2013.

With more than a month until the end of 2014, last week’s £42m fine against Royal Bank of Scotland for its computer meltdown in 2012 took the penalties on banks, other companies and individuals to £1.47bn – up from £474.3m for all of last year.

This year’s figure was boosted by £1.1bn of penalties this month against banks that manipulated foreign exchange markets. Each of the fines imposed on Royal Bank of Scotland, Citibank, JP Morgan and UBS was a record for the regulator, the Financial Conduct Authority.

Tracey McDermott, the FCA’s head of enforcement and financial crime, said: “We don’t set ourselves targets for the number of fines we will issue in a given period. What we look at is whether the sanctions we do impose are having an impact on behaviour. In all cases we seek to use the approach which we believe will be most effective in driving up standards.”

McDermott said fines were part of the FCA’s wider effort to clean up the City including tougher vetting of those in senior people, closer supervision of firms and stricter rules.

Rachel Couter, a partner at the law firm King & Wood Mallesons, said the figures showed the FCA was taking a tougher line, particularly with repeat offenders and companies that made big money from their wrongdoing.

“The recent foreign exchange fines clearly dwarf any of the other fines imposed this year. But there have been a number of other significant fines, particularly of institutions that have earned a lot of revenue from the business area where the breaches occurred.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza