FCA issue review of fines after record-breaking year

The FT reported that the FCA has handed out a record £1.4bn in fines since April, more than triple the £425m levied in the whole of the 2013/14 financial year.

Almost all of this figure is due to the £1.1bn five banks paid to the FCA last month over forex failings.

The FCA fines have increased not only because of benchmark-rigging probes but also because a new penalty regime that allowed for higher fines for wrongdoing found since 2010 is now taking effect.

Georgina Philippou, an FCA director of enforcement strategy, said:

"We believe that we now have enough cases to pause and take stock and we plan to start a review of our penalty policy in the next financial year."

The current regime gives the FCA the discretion to bump up fines to act as a deterrent, which they used on banks in the forex probe because they had not learnt key lessons from the earlier and similar LIBOR investigation.

The fines collected from financial services companies for misconduct go to the Treasury, once the FCA's enforcement costs are deducted. In 2014, £1.43bn went to the Treasury in this way, up from £474m in 2013, according to separate FCA statistics.

Chancellor George Osborne said last week that the fines from the forex investigation would be used as a windfall payment for the National Health Service.

LIBOR fines, meanwhile, which have topped more than £500m in the UK, would be used to pay for military services and related charities.