The FSA has achieved a continued progress in developing new global standards for the prudential regulation of banks, encompassing greatly-enhanced requirements for capital and liquidity, standards to ensure that all banks are resolvable, and special prudential requirements for SIFIs.
The Annual Report highlights four main areas of progress:
1. The FSA’s progress in executing a credible deterrence and enforcement approach throughout 2010/11, including:
• five criminal convictions for insider dealing with sentences ranging from 12 months to three years and four months;
• 15 penalties levied for market abuse, totalling £8,342,804; and
• 13 defendants currently awaiting trial for insider-dealing offences with trial dates fixed for November 2011, February 2012 and April 2012.
2. The launch of a radically new approach to the protection of retail customers, with a willingness to intervene earlier, as highlighted by:
• Securing greater redress for consumers, as highlighted by recent legal proceedings surrounding the complaints handling by institutions of payment protection insurance;
• the publication of their first Retail Conduct Risk Outlook, illustrating how they will seek to identify emerging market developments that could pose risks to consumers, which will help them to focus resources on those risks; and
• continuing to progress their work on major policy initiatives, such as the Retail Distribution and Mortgage Market Reviews.
3. The continued development of a more intensive approach to prudential supervision, as demonstrated by:
• strengthening their capital regime by establishing a comprehensive stress-testing framework;
• working closely with firms to require them to embed reverse stress testing into their business models; and
• implementing new European rules on remuneration, and therefore increasing the number of firms covered by the rules from 26 to 2,700.
4. Continued progress in developing new global standards of prudential banking regulation, by:
• securing senior representation on all of the three new European Supervisory Authorities in order to play an active role on behalf of the UK in European regulation;
• working, through the Financial Stability Board and the Basel Committee, to develop the new prudential regulatory framework, particularly on capital, liquidity and resolution; and
• working to ensure effective implementation in Europe of the Solvency II Directive (for insurance) and the forthcoming CRD IV which will implement Basel III.
Concluding on the Annual Report, Hector Sants said: “Overall we have made good progress against our objectives, within budget, and this is demonstrated by our achievements against the milestones we set out in our Business Plan. I want to express my personal thanks to all our staff for their hard work in achieving this outcome”.
© FSA - Financial Services Authority
Documents associated with this article
FSA Annual report - 2010-2011.pdf
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