RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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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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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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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.