Not Doing Fine

Ed Siddons writes:

The value of fines handed out by the UK’s financial regulator has plummeted to “pitiful” levels, undermining the country's fight against economic crime, new analysis reveals.

The Financial Conduct Authority (FCA) handed out £124m in fines last year – a 78% decline from five years ago, according to data we obtained from public releases and freedom of information requests. The size of its biggest fines, given out to punish the most serious cases of misconduct, have taken a similar nosedive.

The figures raise huge questions about the effectiveness of the agency tasked with regulating financial services and stamping out wrongdoing in the financial sector.

The drop-off suggests that the FCA – which will soon be given new powers as a “super-regulator” – is becoming increasingly reluctant to punish financial crime. It will also spark fears that this let-up is the result of the agency’s new government-mandated duty to foster growth in the national economy.

Lord Prem Sikka, a Labour peer, said fines had reached “pitiful” lows and showed the FCA was “not fit for purpose”.

He added: “The future is bleak as the FCA now has a statutory duty to promote growth of the finance industry. The temptation will be to ignore predatory practices, much to the detriment of the broader public interest.”

Phil Brickell, Labour MP and Chair of the all-party parliamentary group on anti-corruption and responsible tax, called the figures “gravely concerning”.

The FCA told us that fines are only one weapon in its arsenal and that the numbers did not suggest a weaker approach. It denied its new mandate had affected its enforcement decisions.

Shrinking penalties

The figures show the FCA levied fines worth £567.8m in 2021 but that number fell to just £124m last year.

The largest single fine handed out by the FCA against the most serious misconduct in each year has also plunged significantly.

In 2021, the agency secured a £264.8m fine on NatWest for allowing Fowler Oldfield, a jewellery business in Bradford, to launder hundreds of millions through the bank’s accounts. Cash deposits were even delivered in bin bags to local branches. (The FCA told us this fine was unusually large and the amount was set by the courts, not the agency.)

But the largest fine levied last year was £44m, imposed on Nationwide for inadequate money-laundering controls which, in one instance, facilitated Covid-19 furlough fraud worth £27m.

“The recent decline in enforcement action is gravely concerning, at a time when regulators should have the bit between their teeth,” said Brickell. “I’d welcome assurances from the FCA that it is providing a sufficient deterrent to would-be criminals intent on exploiting our financial system.”

The size of its fines may now fall further following a string of recent court defeats that have forced it to slash penalties it had planned to impose on individuals and firms.

This month, a tribunal forced the regulator to reduce its £10m fine of the Luxembourg-based bank Rangecourt SA, formerly Banque Havilland, which it found had “acted without integrity” in trying to devalue the Qatari national currency. The tribunal instead set the penalty at £4m, criticising the “arbitrary” nature of the original fine.

In June 2025, a tribunal also reduced the FCA’s £1.8m fine against Jes Staley, the former head of Barclays who was found to have lied to the regulator about his extensive ties to paedophile financier Jeffrey Epstein, to just £1.1m.

“It is no use having rules if they are not backed up by robust enforcement,” said James Bolton-Jones, senior policy researcher at the charity Spotlight on Corruption.

Treading lightly?

Some campaigners fear that the Starmer government’s “growth agenda”, which was explicitly included in the regulator’s latest five-year strategy, has deterred the regulator from cracking down hard on wrongdoing in the British financial system.

“Strong regulation is key to sustainable economic growth,” said Bolton-Jones, “so the government risks shooting itself in the foot by pressuring the FCA to tread lightly in a desperate bid to secure fleeting gains.”

The FCA is set for a significantly expanded role in the UK’s fight against financial crime in the coming years.

In October, the government announced that the FCA would become a “super-regulator” handling anti-money laundering in sectors like law and accountancy. As it stands, this responsibility is dispersed across some 25 professional bodies – an approach long criticised as ineffective.

“With the FCA now set to gain responsibility for supervising lawyers and accountants for money laundering,” said Bolton-Jones, “it is essential that the FCA stands up to government pressure and prioritises strong enforcement.”

The FCA denied that the agency’s focus on growth had led to softer enforcement, citing its use of different tools – including criminal prosecutions, employment restrictions and warnings – in addition to fines.

“Our strategy explicitly prioritises the fight against financial crime,” the agency told us. “Last year, we secured multiple convictions in respect of fraud, insider dealing and money laundering offences, which resulted in substantial prison sentences.

“Since 2021, we have imposed 14 fines – totalling £344,846,026 – on banks and building societies for AML [anti-money laundering] systems and controls failings. This is in addition to the NatWest criminal case. Our fines are based on the circumstances of each case.”