James Moore: Watchdog's wages don't get much from fees hike
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Outlook: If there is one thing guaranteed to unite the City, it is fury about the fees charged by its regulators.
Yesterday's announcement of a 16 per cent hike in its budget by the Financial Services Authority (FSA) could always be counted on to inflame bankers and insurers.
It will take the regulator's budget up to £578m from £500m. Despite this, some 42 per cent of regulated firms will see no increase at all. They are mostly smaller firms, the sort of SMEs, in fact, that can't get money from the banks at the moment. So it's hard to argue with the FSA giving them a break.
Which means most of the cash will be stumped up by the big boys, the high-impact firms whose failure can cause real damage.
The 16 per cent is split roughly into three, with a third spent on general IT and infrastructure costs, another third going towards one-off reorganisation costs incurred as a result of the Government's shake up of the financial regulatory system, and the final third paying for increased supervision.
The second one was always going to be costly but at least it's a one-off. As for infrastructure, it seems fair enough that the watchdog should get the same sort of up-to-date kit as that used by the banks it polices.
But this leaves only 5 per cent left to be spent on increased supervision, paying the (presumably) increased salary bills of the supervisors.
That actually seems rather low if you think about it.
The City loves to bang on about how it is a world-class financial centre, with world-class firms and world-class people who need world-class pay. Well, if that's that case, it really ought to have a world-class regulator, oughtn't it?
And if you want a world-class regulator you're going to have to pay world-class fees to attract world-class watchdogs to it.
Banks are always saying that the justification for the super-sized salary and bonuses packages they are so fond of lavishing on staff are necessary for them to attract and retain top talent. They can hardly complain if the regulator does the same thing, particularly given the events of the past few years.
And yet, with only 5 per cent of the regulator's increased costs going towards that, is it really happening?
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments