Some 74 banks and financial services firms in the U.K. have secured £1.2 billion in discounts on misconduct fines after settling early with the Financial Conduct Authority, the Financial Times reported March 29.
The FCA provides a 30% discount to any institution that settles a breach in stage one of a dispute, when the regulator has gained an understanding of the infringement and is able to estimate "a reasonable penalty," the newspaper reported, citing the FCA's Decision Procedure and Penalties manual.
A financial services think tank, New City Agenda, calculated that over the four-year period, 66 institutions benefited from a 30% discount and another eight enjoyed a 20% concession on their fines, with only eight firms paying the full amounts, the FT reported.
Lord Sharkey, a Liberal Democrat peer, meanwhile, proposed that the FCA only give discounts to institutions that identify a responsible party for the breach and take disciplinary action. "It would give the firms involved a powerful incentive to take proper remedial action," said Sharkey.
The UK already has a few new measures in place to improve the institutions' and their executives' accountability and Dominic Lindley, director of policy at New City Agenda, said the proposed change could be brought in within a matter of months, said the FT.