Monday, Aug 03, 2009
FSA joins the debt party
Citywire: FSA takes loan of £200m as it falls into the red for the first time
The Financial Services Authority (FSA) has borrowed a total of £200 million from HSBC and Lloyds as it falls into debt for the first time.
The FSA annual report shows the regulator overspent in 2008/09, with net costs for the year totalling £347 million and fees raised in the year standing at £324 million. The deficit is the first time the FSA has gone into the red and according to The Independent on Sunday the regulator has been told by directors - headed by Lord Adair Turner - to review its cashflow.
Posted by jack c @ 01:47 PM (1061 views) Add Comment
11 Comments
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1. paul said...
Rewarding failure with lax controls is obviously an expensive business.
Like the banks they are menat to be overssing though, they still managed to find enough to pay out bonuses before presenting their accounts in the red.
2. jack c said...
You really could not make this stuff up - The regulator (FSA) asleep at the wheel allows a huge banking collapse to develop leading to widespread bailouts using Taxpayer money. The regulator then borrows money from one of the bailed out banks which IMO must give rise to a conflict of interest.
3. will said...
Start by cutting their bonuses which are in line with the Banks.
4. will said...
and I believed that the FSA were a Government department. Now we really know who pays for them to exist.
5. techieman said...
Strange :-). I accept what you are saying Jack but take a look at this:
http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/099.shtml
hmmmm
6. jack c said...
Thanks for the link techieman - maybe the fine should have been bigger thus reducing the FSA deficit and consequently the loan amount !
I have to say nothing surprises me with all of this anymore - all just a big game
7. shining wit said...
FSA borrows money to balance it's books !!!!!!!!!
I've chuffin heard it all now! The financial regulator borrows money as it fails to regulate the banks!
8. techieman said...
Jack - maybe they have a fine against Lloyds coming out soon ?? All just a big game - yep and no prizes for guessing the loosers!
9. jack c said...
techieman - I suspect a series of large fines aimed at the banks for misselling PPI (payment protection insurance) will emerge - this is where the bank loans the customer money and rolls in the PPI at outset as a single premium insurance - looks to me to be an easy FSA target
"All just a big game - yep and no prizes for guessing the loosers!" - yip thats a pretty easy one to work out
10. Chf said...
I work in the PPI field and the bggest fine so far was 7m.
Most have bene less than 1 million.
They spend nearly a year investigating so not that much of a mioney spinner.
cant see any more fines TBH
11. techieman said...
While this thread is still open.....
http://www.fsa.gov.uk/Pages/About/Who/Funded/index.shtml
I have not read the 2009/10 business plan - but if i have insomnia one night i might print it out. I suppose that would tell us if there was a predicted shortfall and how that would be funded. Presumably if an FSA regulated company goes into administration then the FSA lose income going forward and may also be an unsecured creditor.
Having said all that also look at this: http://www.fsa.gov.uk/pages/doing/regulated/fees/
and in particular the FSCS - http://www.fsa.gov.uk/pubs/other/bcr_fscs_levies_update.pdf - infact ill put that on another thread. I THINK the FSA are only responsible for advising the companies they regulate how much is due under that scheme. But i havent read the whole thing.