Banks and insurance companies regulated by the Bank of England are receiving a £8m rebate on the fees they pay to fund the banking watchdog – partly as a result of a fine imposed on Royal Bank of Scotland.
The Bank of England’s regulatory arm, the Prudential Regulation Authority, used new powers to levy fines for the first time last year when it hit RBS with a £14m penalty over its IT meltdown. Some £1.5m of the rebate to other banks will be paid for out of that fine.
It was part of a larger penalty of £56m imposed on the 79%-taxpayer owned bank after an investigation into the 2012 computer glitchthat left 6.5 million customers locked out their accounts.
The other £6.5m comes after the Bank of England ran up a surplus from the fees it charged last year.
The figures were contained in the document outlining the PRA’s funding requirement for 2015/6 when it is asking the firms it regulates for £257.8m, an increase of 4% on the prior period. It did not spell out that the £1.5m rebate was as the result of the RBS fine – but that is the only financial penalty it has ever levied. It said that the firm involved in the enforcement action would not receive the refund which will be shared among the other firms.
In the wake of the Libor rigging scandal, George Osborne required fines imposed on firms to be handed to the Treasury rather than be kept by regulators to reduce the annual levy on firms. The £1.5m being handed back by the PRA is the portion of the fine it was permitted to keep.
RBS was also fined £42m by the Financial Conduct Authority for IT incident. The City regulator keeps £40m annually of the fines it levies. The Treasury has received £2bn from the FCA and its predecessor body the Financial Services Authority since April 2012 when the rule change take place.
The FCA is yet to announce the fees it will charge the industry for the 2015/6 financial year.
This article was written by Jill Treanor, for theguardian.com on Thursday 19th March 2015 17.39 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010