The regulator bites back
It has been revealed that a number of the U.K.'s major banking institutions could see a doubling of their regulatory levy with suggestions that some banks could pay between £10 million and £20 million a year to the regulator. This would appear to be the price which the industry is paying for a period of reckless investment and risk taking. However, even before the proposed levy changes have been brought into practice there are serious concerns that the UK consumer will end up footing the bill.
As with any increased cost in the world of commerce, many companies look to pass on any increases directly to consumers via increased charges. There is no way that banks will sit back and take a £10 million or £20 million hit and allow consumers to "get off scot-free". Quite how the FSA and other regulatory bodies associated with the industry will use this extra funding remains to be seen as there is a suggestion this is payback time. In all, the FSA expects to raise around £450 million to the year end March 31, 2010 which would indicate an increase of 37% on the previous year.
It has also been revealed that the FSA will be taking on nearly 300 new staff and is looking to "increase the pay of certain employees". So what are the banks really paying for? Higher wages, or stricter regulations?
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