A review of Britain’s banking industry by former FSA chief executive Sir Hector Sants has called for the regulator to be stripped of its power to set penalties and redress for misconduct, the FT reports.
The recommendation is one of 23 made by Sants, who headed up the financial watchdog from 2007 to 2012, in a report on UK banking competitiveness published by the British Bankers Association. Sants now works for consultants Oliver Wyman.
The report says the Government should consider establishing “a new independent body responsible for penalty and redress decision-making” outside the FCA.
Sants also suggests policymakers examine the case for increasing operational separation of the FCA’s supervision and enforcement divisions.
The recommendations comes after a series of huge fines issued by the regulator to major banks in recent years, primarily in relation to Libor fixing and payment protection insurance misselling.
Lloyds Banking Group was clobbered with a £117m penalty for failing to handle PPI complaints fairly in June, while Barclays, Deutsche Bank and Clydesdale Bank have also been hit with huge fines in 2015.