Banks and other financial services bodies breaking Europe’s new economic supervision rules should face UK-style multimillion-pound fines, Europe’s single market chief Michel Barnier said.
He called for harmonised minimum penalties for market rigging and manipulation – citing the UK’s Financial Services Authority as the benchmark for such sanctions.
Mr Barnier, expected to produce formal proposals next year, said the problem was that current national penalties varied hugely across the EU – from just 150,000 euro (£127,000) to a few millions.
“We are dealing with something to do with whether people are respecting regulations, and if they are not, something needs to be done,” he told a press conference in Brussels.
“We need good regulations which are respected, reinforced by harmonised penalties.
“There is a risk from financial institutions that do not respect the rules of the market place. Traders and those responsible must realise that they will be hit hard if there is malpractice.”
Mr Barnier said about seven EU countries currently hand out fines for financial malpractice which are around 150,000 euro, while some others impose sanctions of several million.
But the UK FSA recently imposed a fine of £17 million for “non-transmission of information to supervisory authorities in the banking sector”.
Mr Barnier went on: “So we are going to work hard at co-ordination. Member states will have some flexibility when it comes to applying sanctions. But there are good reasons for setting minimum sanctions on key issues so that they have a dissuasive effect”.
The UK sanctions regime is considered the toughest in the EU. Mr Barnier was referring to a fine of £17.5 million recently levied by the FSA on Goldman Sachs for failure to reveal that it was under investigation by the American authorities.