LONDON Dec 21 Fines levied by Britain's
financial regulator total a record 312 million pounds ($507
million) this year after Barclays and UBS
were hit with hefty penalties for rigging a benchmark interest
The figure showed how the Financial Services Authority,
slammed for its "light touch" before the financial crisis, had
found its teeth just as it headed for the history books, law
firm RPC said on Friday.
The previous record for fines was 89 million pounds in 2010.
The FSA will be scrapped in April, replaced by the Financial
Conduct Authority to oversee enforcement as part of a wider
supervisory shake up to learn from the crisis.
"The FSA was raked over the coals for not being tough enough
in the run up to the credit crunch, but these record fines show
that it is now a very different organisation," RPC partner
Richard Burger said on Friday.
The FSA fined Swiss bank UBS 160 million pounds on Wednesday
as part of a joint $1.5 billion settlement with British, Swiss
and U.S. regulators for manipulating the London interbank
offered rate (Libor).
It fined Barclays 59 million pounds in June for
rigging Libor. Royal Bank of Scotland was expected to
settle similar charges early next year.
The FSA's total for this year was less than the $700 million
penalty the U.S. Commodity Futures Trading Commission levied on
UBS this week.
The FSA has also hit firms hard by insisting on full and
prompt compensation for mis-selling, with banks set to
collectively pay out 12 billion pounds to customers who bought
payment protection insurance (PPI).
The Bank of England, which replaces the FSA as Britain's
banking regulator in April, has asked lenders to top up their
capital because of Libor fines and mis-selling compensation.
"The restitution costs for PPI mis-selling are so high that
they have actually impacted banks' balance sheets, potentially
affecting their lending capacity," Burger said.
Since around 2007, the FSA has taken a harder line against
market abuses, resorting to criminal courts for stiffer
penalties rather than just pursuing civil cases.
The government approved a law this week that will require
the FSA's fines, after costs, be given to the treasury.
"They will get plenty of money," FSA director of enforcement
Tracey McDermott told Reuters this week, signalling no let up in
chasing market abusers when she moves to the FCA in April.