The Financial Services Authority has told investment banks to improve checks to prevent mis-pricing of trading positions and to stop firing staff who work in valuation control functions, reports The Independent.
Hector Sants, the FSA's chief executive, sent his warning to the bosses of banks and investment firms last Wednesday, the day the watchdog announced a £5.6m fine for Credit Suisse for failing to prevent traders deliberately mis-pricing assets. The stern letter, published yesterday, was the first such "Dear CEO" missive issued by Mr Sants this year. "The current market conditions increase the valuation challenges and risks faced by banks and investment firms," Mr Sants wrote. "Firms' valuation processes and controls have become increasingly stretched and in some cases have proven to be m...
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