Fines levied by the Financial Conduct Authority fell steeply last year

Jasper Jolly
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The £163m fine against Deutsche Bank made up most of the FCA's 2016/2017 haul (Source: Getty)

The value of fines levied by the Financial Conduct Authority (FCA) fell steeply in the last year, the regulator’s annual report revealed yesterday.

The FCA imposed £181m in financial penalties in the 2016/17 year, a sharp decline from the £884.6m imposed in the previous 12 month.

Most of the total levied in the last year came from the single £163m enforcement action against Deutsche Bank in January for a “mirror trading” scheme which broke anti-money laundering rules in relation to Russian accounts.

FCA chief executive Andrew Bailey hailed the Deutsche Bank penalty as “the largest financial penalty for anti-money laundering controls failings ever imposed by the FCA, or its predecessor”.

Read more: FCA asset management market shake-up: How the City has reacted

However, the regulator said the fall in overall fines came because of the “exceptional” punishments handed out to banks for foreign exchange manipulation and the Libor rate-fixing scandal in previous years.

The number of individual fines also fell by more than half, from 34 to 15. In the 2014/15 financial year 43 fines yielded £1.4bn.

The report said: “There has been no change in our approach to misconduct or financial penalties.”

The report also showed the value of compensation claims for the misselling of payment protection insurance (PPI) rose to £26.9bn.

A final deadline for PPI claims in August 2019 will lead to an “orderly conclusion and bring finality and certainty for consumers and firms”, the FCA said.

Meanwhile efforts to encourage employees of firms to report illegal behaviour did not result in more whistleblowers. The number of whistleblowing cases fell by 11 per cent, from 1,104 to 900.

Only seven of those 900 cases “directly contributed to FCA enforcement activity or the protection of consumers through other intervention”, the report said.

The FCA has made a deliberate attempt in the last year to improve its internal staff training at dealing with whistleblowing, and has also implemented a new case management system.

Read more: How the FCA's asset management reforms could affect your money

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