FSA watching those who benefited from banking crisis
The FSA (Financial Services Authority) has confirmed that those banks that benefited from "unusual market conditions" during the credit crunch will be forced to inject further capital into their balance sheets as a way of preventing large scale bonuses being paid out. This is the latest in a number of bizarre statements from the FSA, with many people believing they are unachievable both practically and legally.
There is no doubt that the FSA has been watching those banks that have profited from these conditions although whether they will be able to legally force them to retain more cash on their balance sheets remains to be seen. While you cannot doubt the amount of pressure which has been built up by the FSA, the Treasury and the UK government with regards to bonus payments and large remuneration packages, so far it has seen very little movement from both UK and overseas-based banks. Whether this changes in the short term is debatable but the FSA certainly has a fight on its hands with regards to retaining the power in the UK.
This ongoing power struggle between the regulators and the financial sector seems set to continue for some time to come but who will win is still very much up in the air.
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