FSA chief threatens jail for wayward financiers

by Gill Montia

Story link: FSA chief threatens jail for wayward financiers

The chief executive of the Financial Services Authority (FSA) has warned that there needs to be “genuine cultural and behavioural change” within the UK financial services sector.

Speaking in London yesterday, Hector Sants referred to the FSA’s “radical new intensive supervisory regime” and challenged financial firms to bring in changes that “provide the outcomes society expects”.

He went on to say there is an absence of the acceptance of collective responsibility for the credit crisis among the UK’s financial institutions.

However, the regulator levied a record number of fines in 2008-9 and further “tough action” can be expected which could include people going to jail.

Since his appointment in July of 2007, Mr Sants has recruited 280 additional supervisory and specialist staff, allowing the regulator’s role will be “increasingly proactive”, using techniques such as mystery shopping, to test the true outcome for consumers.

The FSA’s most recent major enforcement action involved handing down a £2.8 million fine to sub-prime lender GMAC-RFC for failing to treat customers fairly.

The firm will also be repaying up to £7.7 million (plus interest) to over 46,000 of its mortgage customers.