“Soft touch” regulator: financial crime fines collapse from £567m to £124m

05 March 2026 , 08:18

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The value of fines issued by the UK’s financial regulator has dropped to "pitiful" levels, undermining the country’s fight against economic crime, new analysis shows.

The Financial Conduct Authority (FCA) distributed £124m in fines last year—a 78% decline from five years ago, according to data we obtained from public releases and freedom of information requests. The size of its largest fines, aimed at punishing the most severe cases of misconduct, has similarly declined.

The figures raise significant questions about the effectiveness of the agency responsible for regulating financial services and curbing wrongdoing in the financial sector.

The decline suggests that the FCA—which will soon be granted new powers as a "super-regulator"—is becoming increasingly hesitant to penalize financial crime. It will also spark concerns that this decrease is due to the agency’s new government-mandated duty to foster growth in the national economy.

Lord Prem Sikka, a Labour peer, said fines had reached "pitiful" lows and indicated the FCA was "not fit for purpose".

He added: "The future is bleak as the FCA now has a statutory duty to promote the growth of the finance industry. The temptation will be to overlook predatory practices, much to the detriment of the broader public interest."

Phil Brickell, Labour MP and Chair of the all-party parliamentary group on anti-corruption and responsible tax, called the figures "gravely concerning".

The FCA told us that fines are only one tool in its arsenal and that the numbers do not indicate a weaker approach. It denied that its new mandate had affected its enforcement decisions.

Shrinking penalties

The figures show the FCA levied fines worth £567.8m in 2021, but that number fell to just £124m last year.

The largest single fine handed out by the FCA for the most serious misconduct each year has also significantly dropped.

In 2021, the agency issued a £264.8m fine to NatWest for allowing Fowler Oldfield, a jewelry business in Bradford, to launder hundreds of millions through the bank’s accounts. Cash deposits were even delivered in bin bags to local branches. (The FCA told us this fine was unusually large and the amount was set by the courts, not the agency.)

But the largest fine imposed last year was £44m, levied on Nationwide for inadequate money-laundering controls which, in one instance, facilitated Covid-19 furlough fraud worth £27m.

"The recent decline in enforcement action is gravely concerning, at a time when regulators should be more proactive," said Brickell. "I would welcome assurances from the FCA that it is providing a sufficient deterrent to would-be criminals intent on exploiting our financial system."

The size of its fines may now fall further following a series of recent court defeats that have forced it to reduce penalties it had planned to impose on individuals and firms.

This month, a tribunal compelled the regulator to lower its £10m fine against the Luxembourg-based bank Rangecourt SA, formerly Banque Havilland, which it found had "acted without integrity" in attempting to devalue the Qatari national currency. The tribunal instead set the penalty at £4m, criticizing the "arbitrary" nature of the original fine.

In June 2025, a tribunal also reduced the FCA’s £1.8m fine against Jes Staley, the former head of Barclays who was found to have lied to the regulator about his extensive ties to paedophile financier Jeffrey Epstein, to just £1.1m.

"It is no use having rules if they are not backed up by robust enforcement," said James Bolton-Jones, senior policy researcher at the charity Spotlight on Corruption.

Treading lightly?

Some campaigners fear that the Starmer government’s "growth agenda", which was explicitly included in the regulator’s latest five-year strategy, has deterred the regulator from strictly addressing wrongdoing in the British financial system.

"Strong regulation is key to sustainable economic growth," said Bolton-Jones, "so the government risks undermining itself by pressuring the FCA to tread lightly in an effort to secure short-term gains."

The FCA is set for a significantly expanded role in the UK’s fight against financial crime in the coming years.

In October, the government announced that the FCA would become a "super-regulator" handling anti-money laundering in sectors like law and accountancy. Currently, this responsibility is spread across some 25 professional bodies—an approach long criticized as ineffective.

"With the FCA now set to gain responsibility for supervising lawyers and accountants for money laundering," said Bolton-Jones, "it is essential that the FCA withstands government pressure and prioritizes strong enforcement."

The FCA denied that the agency’s focus on growth had led to softer enforcement, citing its use of various tools—including criminal prosecutions, employment restrictions, and warnings—in addition to fines.

"Our strategy explicitly prioritizes the fight against financial crime," the agency told us. "Last year, we secured multiple convictions in cases of fraud, insider dealing, and money laundering offenses, resulting in substantial prison sentences.

"Since 2021, we have imposed 14 fines—totaling £344,846,026—on banks and building societies for AML [anti-money laundering] systems and control failures. This is in addition to the NatWest criminal case. Our fines are based on the circumstances of each case."