Nothing to fine here: bank fines drop 99.7%

Bank of England

The Bank of England’s PRA and the FCA have levied far less in bank fines in 2016

As of October 5, the combined total of fines from the Financial Conduct Authority and the Prudential Regulation Authority in 2016 was £36.5 million, according to analysis by regulatory technology firm Wolters Kluwer. That compares with £906 million in all of 2015, almost £1.5 billion in 2014 and about £335 million in 2013, when the FCA and PRA were set up in the April that year.

There has been a particularly sharp fall in the share of all fines levied against banks. Those account for less than 7% of fines so far in 2016, compared with more than 90% in each previous year. Bank fines totalled £2.4 million in the year to October 5, compared with £851 million in 2015.

The sector with the greatest share of total fines imposed on it in 2016 is insurance.

Banks have dominated fines in past years due to some notable penalties, including a £284 million charge on Barclays in 2015 for manipulating foreign exchange rates.

Mary Stevens, London-based global regulatory analysis manager in the finance, risk and reporting business at Wolters Kluwer, described the 2016 fines as “minute”. She added that the pressure on the banking industry appeared to have lessened since the departure of former FCA boss Martin Wheatley in September 2015.

At the time of Wheatley’s leaving, the move was widely seen as a government-driven response to a regulatory environment that one lawyer said at the time had become “too aggressive” and “too anti-bank”.

A person close to the regulators, however, disagreed with Stevens’ argument, noting that cases can take years to result in a fine and so activity in 2016 should not be taken to reflect events in 2015.

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