FINANCIAL services companies face the prospect of paying out more to the industry regulator to cover the cost of new measures brought in after the Northern Rock crisis.
Hector Sants, the chief executive of the Financial Services Authority (FSA), warned yesterday that the watchdog will have to levy higher fees on the firms it regulates to cover its higher costs.
Regulated firms already pay between £1,500 and £25,
000 to become FSA-registered.
At the FSA's annual public meeting yesterday, Sants told around 400 financial company representatives that a programme to ensure that banks are better supervised would lead to "increased costs".
He added that the costs meant the FSA would be likely to exceed its budget in the financial year 2008-9, and the impact would continue into the next year.
Industry bodies yesterday raised concerns over the possibility of increased fees, but added that they supported regulation in the financial services industry.
Sants said: "The last year has been difficult for the FSA. Perhaps the most challenging since its creation ten years ago. You should be in no doubt we regret the events surrounding Northern Rock.
"But respected and durable institutions grow stronger in times of adversity."
A spokeswoman for the FSA said: "We are not proposing the change in fees for2008-9 but it has implications for costs in 2009-10."
A spokesman for the Association of British Insurers said: "We will monitor the situation, and are happy to speak to the FSA over any proposed changes to the structure of fees.
"Insurers are committed to effective regulation and are keen to support it."
The full article contains 275 words and appears in The Scotsman newspaper.
