Regulator now costs £580m
THE CITY regulator has demanded an extra £80m from the firms it supervises in order to cover a 16 per cent rise in costs in the run-up to its abolition.
The Financial Services Authority, which admitted several failures in the period leading up to the financial crisis, said it would need £578.4m for 2012-13, up from £500m for this year, sparking anger in the Square Mile.
It said it needs the money as it invests in technology to prepare for its replacement by two agencies covering companies and consumer protection.
The British Bankers’ Associations said it was in favour of “smart” regulation but added: “We want to see an increase in fees going on quality regulators and not a hike in bureaucracy and red tape.”
Simon Morris of law firm CMS Cameron McKenna said: “A regulator on whom the sun is setting should cap its expenditure accordingly.”
Otto Thoresen, director general of the Association of British Insurers, whose members own a fifth of the stock market, said the increased burden would push up insurance prices for consumers and companies.
The FSA said large firms will bear the brunt of the increase, reflecting their greater use of its resources, with 42 per cent of regulated companies paying only the minimum £1,000 fee.