Watchdogs ask for £650m fees from City firms
10 April 2013 1:58am
THE NEW dual system of finance regulation means the sector will see fees hiked sharply this year, with particular focus on the big banks, the watchdogs revealed yesterday.
Overall the costs will come to £646.3m, a rise of 15 per cent on last year’s costs. The Financial Conduct Authority (FCA) will take £432.1m of that, with the Bank of England’s prudential regulation authority (PRA) accounting for the remainder.
Of the increase, £34.4m is allocated to front line staff costs as supervision becomes more intensive, while £43.9m will go towards improving IT systems.
Investigating Libor manipulation alone will cost an extra £13.5m this year, the FCA predicts.
The FCA covers the largest number firms, responsible for monitoring the behaviour of 26,000 firms, with the prudential regulation authority only covering around 3,000, predominantly the large banks and insurers whose behaviour could impact on stability.
However a large number of the FCA’s firms will pay a minimal amount, as the costs rise for firms that pose the biggest risks and need the most intensive monitoring.
Around 42 per cent of firms will pay £1000, the minimum level and the same amount as they paid under the Financial Services Authority.
But that means the biggest firms will see a sharp rise in fees, with some expected to pay around 25 per cent more, potentially costing tens of millions of pounds a year.
The regulators pledged to bear down on costs in future to stop banks being stung so hard year on year.
“The PRA will make every effort to reduce its costs and take advantage of sharing support costs with the Bank of England and seeking efficiencies in its operations as part of any Bank-wide value for money initiatives,” the watchdog said.
“The FCA is fully committed to improving the value for money of the services it provides to stakeholders.”
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