Sir, Your article “Questions raised over Financial Conduct Authority’s forex probe” (November 12) queries the FCA’s methodology in dealing with the scandal, but could have gone on to challenge its solution to it. At least in the case of Royal Bank of Scotland Group, the fines the FCA imposed are ill-judged and counter-productive.

RBS is, of course, 79 per cent owned by the UK taxpayer, so 79 per cent of its fine was imposed by ourselves on ourselves. But far from being a near non-event, the fine’s injury to the bank’s reputation and damage to its financial health will impede the government’s effort to offload its stake, as well as harming the bank’s valuation in the market, thus diminishing the sale proceeds to be received.

Moreover, at a time when the government is pulling out all the stops to increase lending, a diminution in this important institution’s capital base, the ensuing dent to its employees’ confidence, and the impediments to efficiency brought about by the inevitable increase in the burden of compliance and regulation, will all push it in the wrong direction.

The truth, of course, is that the fines were less driven by a sense of justice than an attempt to appease resentment against the banks, and by a disingenuous desire to stoke the threadbare public coffers.

It would have served the object more efficiently to make the individuals involved the prime target rather than the institutions.

David Crook

Chief Executive,

Tail Wind Advisory & Management,

London WC2E, UK

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