Fines levied by the regulator against the financial services industry soared by almost 50% this year, as the tougher stance of the new Financial Conduct Authority (FCA) left its mark.
A raft of high profile names have been put in the frame since the FCA took over the regulatory reigns in April, including Clydesdale Bank, J.P. Morgan Chase, Axa Wealth, Aberdeen Asset Managers, Royal Bank of Scotland, Sesame, Prudential, Lloyds, UBS and the Co-operative Bank.
The total amount of fines under the FCA is £444.2m. The figures were collated before Wednesday's record fine for Lloyds Banking Group for sales incentives failings.
Add to this the swansong of fines levied by the outgoing Financial Services Authority (FSA) in the first three months of the year - £1.9m - and the total for 2013 is £446.1m.
This compares to £311.5m under the FSA in 2012 - a 43% increase in a year.
In even starker contrast, the total fines levied under the FSA in 2011 were just £66.1m.
The bumper amount of fines this year is the result of a combination of failings uncovered in the financial industry, including LIBOR rigging, payment protection insurance mis-selling, poor transaction reporting, giving unsuitable mortgage and investment advice and failing to protect client money.
Money generated from regulatory fines used to go to the regulator to reduce levies for the rest of the industry prior to December 2012, when the government under the Financial Services Bill diverted the funds to the Treasury's coffers.
Panacea founder Derek Bradley said this set up and the sheer size of the fines this year raises questions about the soundness of the penalty system.
"We are now treading a very fine line between fines being there as a deterrent and being there as a source of revenue for the Treasury," he said.
In his Autumn Statement, Chancellor George Osborne said he would be giving £100m from fines generated from the financial services industry to armed forces charities.
"Soldiers shouldn't have to depend on charities in the first place," said Bradley, "and the financial services industry shouldn't be picking up the bill for it."
He added: "If the government don't feel the fines should be used to reduce regulatory levies then they should be used to fund the Financial Services Compensation Scheme (FSCS)."
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