For the FSA to ask for a 10% increase in funding is a major kick in the teeth for all the thousands of smaller firms forced to make drastic cut backs as the economic situation continues to bite.
CEO Hector Sants claims the rise is necessary to help the regulator run its enhanced supervision regime-which it was forced to implement after totally failing in its task to regulate the banks effectively.
Now, the FSA is asking for the chance to put things right with hundreds of extra staff drafted into Canary Wharf to help it up its game.
Many would argue throwing more money at the issue may not be the answer. Although the FSA says it has learnt from its mistakes of the past few years it is hard to change the mindset of what is becoming an increasing unwieldy organisation.
As far as the Tories are concerned, the game is already up for the FSA despite its promise of change and the announcement it needs even more money to do the job it was supposed to be doing in the first place will not help its cause.
As far as advisers are concerned, there is good news for some in the short term who will benefit from a fee cut, although mortgage brokers suffer a 33% hike. However, in the longer term, IFAs will all suffer if the FSA can't get itself in order now.
It needs to be on top of problems before they emerge rather than waiting, as happened with its lax supervision of structured product sales, for an issue to blow up in its face.
A tougher stance does not necessarily mean a more effective stance and although the threat of harsher financial penalties may get some firms in line, it is not an overnight fix. We are not too afraid of the FSA-yet.
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‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected