Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

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RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

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China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Categorized | Banks, Financial

FCA’s crackdown on individuals bears fruits

Posted on October 3, 2016

Inside The Financial Conduct Authority As Investigations Begin Into Private Accounts Of Forex Traders...A logo sits on a window in the reception area of the headquarters of the Financial Conduct Authority (FCA) in the Canary Wharf business district in London, U.K., on Thursday, Nov. 21, 2013. The FCA is working with regulators including the U.S. Department of Justice and the Commodity Futures Trading Commission to investigate the potential manipulation of the foreign-exchange market. Photographer: Chris Ratcliffe/Bloomberg©Bloomberg

A promised regulatory crackdown on individual behaviour rather than headline-grabbing fines on companies is beginning to bear fruit, with the number of people banned from holding jobs in the City of London rising for the first time in four years.

The UK’s Financial Conduct Authority banned 27 people after regulatory infractions last year — a slight uptick on the 25 who were prohibited the previous year, according to new statistics. There has been a sharp decline, though, since the financial crisis, when 72 people were banned in 2010.

    More fines and bans against individuals have popular support. Regulators and prosecutors have been criticised for not taking action against bank bosses; a point underscored when, after inaction at the time, the regulator began an investigation earlier this year into the former bosses of HBOS, the lender that collapsed eight years ago.

    Meanwhile, policymakers have questioned the wisdom of multimillion-pound fines, which they argue can weigh on a bank’s ability to lend and do not do much to address individual failings.

    “Many at the FCA believe that it is prohibition orders, fines against individuals and prison sentences that act as the best deterrent. However, these are harder to come by than some expect,” said Richard Burger, a partner at Reynolds Porter Chamberlain, the law firm that gathered the data.

    “There is still enormous pressure from politicians and other commentators on the FCA to bring more enforcement cases.”

    Parallel data show that fines meted out by the FCA on corporates have fallen for the first time in four years. The high level of fines was caused by settlements of the probes into rigging of Libor and foreign-exchange benchmarks.

    Those investigations sapped resources at the regulator, explained Mr Burger.

    “Now work in that area has been wound down, it has freed up enforcement staff to pursue other matters,” he said.

    Cases against individuals, whose livelihoods are at risk, can be fiercely contested, however, while regulatory cases against companies mostly settle. The FCA confirmed earlier this month that a former Barclays executive is challenging the watchdog’s planned ban for sitting on a damning dossier detailing cultural failings at a US unit.

    The statistics come as the FCA has pledged to root out poor culture across the City. Last week, the head of the watchdog railed against some lenders and insurers that had tried to game tough new rules designed to hold the most senior executives to account for failings on their watch.

    The FCA has forecast that it will take more enforcement action against individuals as a result of the new rules, which came into effect in March and which will be extended across all financial firms by 2018.

    The FCA declined to comment.