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Editor's Opinion Blog

22 Aug 2022

Crime and punishment

Crime and punishment

Surely there’s something wrong with a regulatory environment in which it takes four years to fine a bank for not implementing important new regulations around market abuse? What about giving the bank a 30% discount for agreeing to be sanctioned – should regulators model themselves on COSTCO? What about that amount – £12,553,800? It’s weirdly specific. Personally, I prefer the US approach, which mimics the way plumbers charge in the UK. They see a breach. There’s a sharp intake of breath and then, “That’ll be $200 million.”

And how does that £12,553,800 relate to the amount of business the bank did over the period to which the fine refers. Well, it did about £2.6 billion in revenue in related businesses during that period. So, if I ran a bank, or certainly the sales and trading arm, or any business within that, I’d take the view that these types of fines were simply a cost of doing business. I’d also figure that I’d be quite likely to be long gone with my bonuses spent when the regulators finally came around to get me.

Maybe this is the kind of thing that’s give prime-minister-in-waiting Liz Truss the idea to merge the FCA, PSR and PRA.

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