FSA regulatory restructure bill cost £44m

Scrapping the Financial Services Authority (FSA) cost the taxpayer a total of £43.9 million, according to the final annual report released by the industry watchdog.

The regulatory restructuring, which saw the FSA abolished and the majority of its functions transferred to the Financial Conduct Authority (FCA) and the PRA, incurred costs of £31.6 million in 2012/2013; on top of the £12.3 million in reform costs from the previous two years.

The Regulator was often criticised for an inability to stamp its authority within a wildly misbehaving industry, and creating what many believe to be a culture that allowed banks to lobby against regulation.

The report further revealed a total of £381.9 million was collected in financial penalties with all financial penalty receipts, netting £38.2 million in enforcement costs, were paid to the Exchequer in April.

The FSA was funded by the fees it gained from those that it authorised, recognised and registered, which in its last year of service.

Interestingly, the report detailed the pay-off packages for the directors of the now defunct City-Regulator, with Sir Hector Sants, the FSA’s former Chief Executive who was knighted in the New Year, receiving a £300,178 pay-off, Chairman Lord Turner was paid £252,000, and ex-Head of Enforcement Margaret Cole picked up £250,897.

The Report revealed that Martin Wheatley, Chief Executive of the Consumer Protection arm of the Financial Conduct Authority, received £667,085 – including an £86,000 bonus and £112,386 in “other benefits” - including a chauffeur-driven car and ten days holiday above his 25-day allowance.

Hidden away in the Report, it was also disclosed that during the final year of operation, the FSA recruited a staggering 30 new heads of department.