Member Article

City sacking reach five-year high

Sackings and suspensions in the City have reached a five-year high, according to research from legal firm Pinsent Masons.

The research states 1372 financial services employees were dismissed or suspended in 2012, representing a 76% increase in dismissals and suspensions compared to the previous twelve months.

The number of job losses has reached its highest level since the peak of the financial crisis in 2008. Data was obtained via a freedom of information request, as changes to the employment status of individuals with FSA authorisation must be registered with the regulator.

FSA-regulated businesses are also expected to indicate where employees have been sacked or suspended, mostly commonly, Pinsent say, as a result of suspected wrongdoing.

Helen Farr, a London-based Partner in the Financial Services team at Pinsent Masons, says: “The FSA has increasingly shown that it is cracking down on financial crime and market abuse. Financial services firms are operating under increased scrutiny and as a result employers are imposing industry rules more strictly.

“FSA enforcement activity has clearly had an impact on firms’ willingness to tolerate wrongdoing. Firms now appear much more likely to discipline employees for offences. The rise in number of staff dismissed from 778 to 1373 in a twelve month period suggests that the threat of enforcement and reputational damage associated with rogue traders such as Kweku Adoboli are clearly having an impact.

“The total number of job losses in the sector is striking. While it should be kept in mind that many of these people may have been re-employed and some will have simply transferred internally, the numbers certainly tell a story.

“It will be interesting to see the impact that further reforms around ring fencing or formal separation of business divisions, as foreseen by the Vickers and Liikanen Reports, will have on the banking sector.”

This was posted in Bdaily's Members' News section by Tom Keighley .