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FCA fines halve in 2020 as number hits record low
16th Dec 2020 08:38
(Sharecast News) - Fines imposed by the Financial Conduct Authority have more than halved in 2020 as the number of penalties has dropped to a record low.
The regulator has meted out £184m of punishments this year compared with £392m in 2019. The number of fines has dropped to 10 from 21.
The FCA appeared to round off the year on 15 December with a £26m fine for Barclays over the bank's treatment of customers in financial difficulty. Lloyds Banking Group paid out the year's biggest penalty when the FCA imposed a £64m fine for unfair treatment of struggling mortgage customers.
The FCA's next biggest fine was for Goldman Sachs, which paid £48m as part of a $2.9bn international settlement of the 1MDB scandal in Malaysia. The Bank of England also fined Goldman £48m.
Other multimillion penalties were £38m for slack anti-money laundering measures at Commerzbank's London branch, £3.4m for TFS-Icap and £2.8m for Moneybarn.
The annual tally of fines was the lowest since the FCA took over from the Financial Services Authority in 2013 and lower than the number in any year for the FSA going back to 2007 when publicly available records stop.
The FCA was in flux in 2020 after Andrew Bailey quit as chief executive to be governor of the Bank of England. Strategy chief Christopher Woolard became interim CEO but missed out on the permanent job to London Stock Exchange CEO Nikhil Rathi who took over in October.
The regulator has also been occupied with preparing the financial sector for business after the post-Brexit transition period ends on 31 December and the effects of the Covid-19 crisis.
The FCA has told banks to give customers payment holidays and interest-free overdrafts to help them during the coronavirus emergency. It also took a test case to the High Court that ruled in favour of policyholders seeking payouts on business interruption insurance.
An FCA spokesperson said: "Enforcement has continued as normal during the pandemic. The FCA will open cases where it suspects serious misconduct, with the number of new cases and outcomes fluctuating month on month and year on year. Nothing much should be read into the figures."
FCA fines after enforcement costs are paid to the Treasury though before 2012 they were used to reduce regulatory costs for well-behaved firms.
On Wednesday the wealth management and financial advice sector called on the Treasury to divert the money to reduce the cost of the Financial Services Compensation Scheme (FSCS).
Tim Fassam, policy director at trade body PIMFA, said: "This would either limit FSCS levy increases to a more manageable level or, potentially, reverse FSCS levy increases altogether. Recent years have shown the harm that can be done to consumers when the market goes wrong, with well-run firms picking up the bill via the FSCS."
FCA fines hit a four-year high in 2019 as they rebounded from £61m the year before. At the time the regulator was accused of failing to protect consumers. Penalties peaked at £1.5bn in 2014 when the regulator charged banks £1.1bn for rigging foreign exchange markets.
The regulator has meted out £184m of punishments this year compared with £392m in 2019. The number of fines has dropped to 10 from 21.
The FCA appeared to round off the year on 15 December with a £26m fine for Barclays over the bank's treatment of customers in financial difficulty. Lloyds Banking Group paid out the year's biggest penalty when the FCA imposed a £64m fine for unfair treatment of struggling mortgage customers.
The FCA's next biggest fine was for Goldman Sachs, which paid £48m as part of a $2.9bn international settlement of the 1MDB scandal in Malaysia. The Bank of England also fined Goldman £48m.
Other multimillion penalties were £38m for slack anti-money laundering measures at Commerzbank's London branch, £3.4m for TFS-Icap and £2.8m for Moneybarn.
The annual tally of fines was the lowest since the FCA took over from the Financial Services Authority in 2013 and lower than the number in any year for the FSA going back to 2007 when publicly available records stop.
The FCA was in flux in 2020 after Andrew Bailey quit as chief executive to be governor of the Bank of England. Strategy chief Christopher Woolard became interim CEO but missed out on the permanent job to London Stock Exchange CEO Nikhil Rathi who took over in October.
The regulator has also been occupied with preparing the financial sector for business after the post-Brexit transition period ends on 31 December and the effects of the Covid-19 crisis.
The FCA has told banks to give customers payment holidays and interest-free overdrafts to help them during the coronavirus emergency. It also took a test case to the High Court that ruled in favour of policyholders seeking payouts on business interruption insurance.
An FCA spokesperson said: "Enforcement has continued as normal during the pandemic. The FCA will open cases where it suspects serious misconduct, with the number of new cases and outcomes fluctuating month on month and year on year. Nothing much should be read into the figures."
FCA fines after enforcement costs are paid to the Treasury though before 2012 they were used to reduce regulatory costs for well-behaved firms.
On Wednesday the wealth management and financial advice sector called on the Treasury to divert the money to reduce the cost of the Financial Services Compensation Scheme (FSCS).
Tim Fassam, policy director at trade body PIMFA, said: "This would either limit FSCS levy increases to a more manageable level or, potentially, reverse FSCS levy increases altogether. Recent years have shown the harm that can be done to consumers when the market goes wrong, with well-run firms picking up the bill via the FSCS."
FCA fines hit a four-year high in 2019 as they rebounded from £61m the year before. At the time the regulator was accused of failing to protect consumers. Penalties peaked at £1.5bn in 2014 when the regulator charged banks £1.1bn for rigging foreign exchange markets.