Contentious exits up 76% in financial services sector
The number of sackings and suspensions of staff at financial institutions has reached its highest level in 5 years, according to figures obtained by international law firm Pinsent Masons.
Data obtained by Pinsent Masons through a Freedom of Information request shows that 1373 financial services employees were dismissed or suspended in 2012 - representing a 76% increase in dismissals and suspensions compared to the previous twelve months.
Pinsent Masons says that changes to the employment status of individuals who require FSA authorisation to carry out their function must be registered with the regulator. FSA-regulated businesses are also expected to indicate where employees have been sacked or suspended, most commonly as a result of suspected wrongdoing.
In addition to sackings and suspensions, the data suggests that the number of job losses in the sector has reached its highest level since the peak of the financial crisis in 2008. 36,868 people in the sector lost their jobs in 2012, bringing the total number of people to have left their posts in the past 5 years to 177,697.
Helen Farr, a London-based Partner in the Financial Services team at Pinsent Masons, says: 'The FSA has increasingly shown that it is cracking down on financial crime and market abuse. Financial services firms are operating under increased scrutiny and as a result employers are imposing industry rules more strictly.
'FSA enforcement activity has clearly had an impact on firms' willingness to tolerate wrongdoing. Firms now appear much more likely to discipline employees for offences. The rise in number of staff dismissed from 778 to 1373 in a twelve month period suggests that the threat of enforcement and reputational damage associated with rogue traders such as Kweku Adoboli are clearly having an impact.
'The total number of job losses in the sector is striking. While it should be kept in mind that many of these people may have been re-employed and some will have simply transferred internally, the numbers certainly tell a story.
'It will be interesting to see the impact that further reforms around ring fencing or formal separation of business divisions, as foreseen by the Vickers and Liikanen Reports, will have on the banking sector'.