Banks to be hit with bigger bill for FSA
MAJOR banks must dig deeper into their pockets over the coming year to pay for tougher supervision, the Financial Services Authority has said.
The FSA is wholly funded from levies on financial firms and said its annual bill for 2010-11 will jump ten per cent to £454.7m though 60 per cent of firms will actually pay less.
Big banks like HSBC and Barclays will bear the brunt of the fees for the first time.
“The increased cost of intensive supervision will be levied on those firms whose size and impact require the most regulation from the FSA,” the watchdog said in a statement.
Planning ahead for the year will be seen as a sign of confidence that the FSA has a future.
Before coming to power in last month’s elections, the Conservative Party said it would scrap the watchdog and hand all its supervisory powers to the Bank of England.
Since the Conservatives were forced to enter a coalition with the Liberal Democrats, the FSA appears to have won a reprieve.
Last year it warned financial firms to be “very afraid” as it sought to end an era of “light touch” regulation that culminated with huge state bailouts of several banks.
Some of the FSA’s enforcement powers also appear set to be transferred a new white collar crime busting agency.
The British Bankers’ Association said it accepted that good regulation costs money.
“What we have never been keen on is that you spend the money on increasing bureaucracy and not better regulation,” it said.
The FSA said it will also need the extra cash to implement tough new bank capital and liquidity rules and a new European Union law to keep insurers solvent, the largest project undertaken by the watchdog.