Banks and other financial firms have been given a £1.2 billion discount on FCA fines

Banks and other financial firms which are subject to enforcement action by the FCA can receive discounts of up to 30% on their fines if they settle their case. Between 2013 and 2017 banks and other financial firms were given discounts of £1.2 billion by the FCA on their fines.

Lord Sharkey has proposed an amendment to the Criminal Finances Bill which would require banks and other financial firms to identify and take disciplinary action against the staff responsible for the misconduct before they can receive the full discount on an FCA fine.

Lord Sharkey said: “The amendment proposes to put the gigantic discount mechanism to better use. This is a simple proposal. It would give the FCA more power, more say and more insight into how transgressors had modified their behaviour and addressed individual and structural capability. It would give the firms involved a powerful incentive to take proper remedial action – which, unfortunately still seems to be needed.”

In June 2013 the Parliamentary Commission on Banking Standards recommended that the FCA and the PRA conduct a review of their penalty setting framework to allow a “further substantial increase in fines”. Three and a half years later this has yet to be undertaken.

Between 2013 and 2017 the FCA levied 82 financial penalties on banks and other financial firms, fining them a total of £3 billion. But firms received discounts totalling £1.2 billion. Without these discounts banks and other firms would have been fined £4.2 billion.

Of the 82 financial penalties levied, on 66 occasions firms received a discount of 30%, on 8 occasions firms received a discount of 20% and on 8 occasions firms received no discount.

Deutsche Bank has received the largest total discount on its FCA fines at £165 million followed by RBS at £157 million and JP Morgan at £155 million. The top 5 discounts applied to individual fines were all to penalties for FX manipulation.

Top 5 largest discounts on specific fines
UBS £100,206,000
Deutsche Bank £97,200,000
Citibank £96,675,000
JP Morgan £95,214,000
The Royal Bank of Scotland £93,000,000


Revenue raised from FCA fines (after the deduction of enforcement costs) is received by HM Treasury and is used to fund armed forces and emergency services charities and other good causes.

The Criminal Finances Bill seeks to make the legislative changes necessary to give law enforcement agencies, and partners, capabilities and powers to recover the proceeds of crime, tackle money laundering and corruption, and counter terrorist financing.

In October 2016, New City Agenda published the report “Cultural Change in the FCA, PRA and Bank of England: Practising What They Preach?”