Financial Services Authority to hit banks for more cash
At a time when the UK banking industry is still struggling it has been revealed that the Financial Services Authority (FSA) is looking to increase financial company contributions towards the cost of regulation and associated expenses. However, as we saw over the last few weeks, building societies amongst others have been very vocal in their calls for a reduction in regulatory premiums at this point in the economic recovery.
So we can assume that UK banks, financial institutions and building societies will be united in their condemnation of the 36% increase in regulatory costs. However, while the banks and building societies may make noises in the press it is the UK consumer who will effectively pay for the increase in the end. Increased charges, higher interest rates and severe restrictions on liquidity are likely to be just some of the prices the UK consumer will pay for this extra regulatory burden.
Coming hot on the heels of a 40% increase in FSA bonus payments for the current year this is not exactly a successful PR stunt and has opened up the FSA to significant criticism from the UK consumer. Ultimately, no matter which industry we are talking about, any increase in the regulatory burden or compensation payments are effectively paid for by consumers at the end of the day.
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