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[ 2010-06-07 ]

City clampdown earns consultants £16m
Financial Services Authority splashes out on support as PwC
heads list of seven top advisers to benefit from tougher
approach

London (UK) – 24 May 2010 – The Times - The shake-up at the
Financial Services Authority has produced a windfall for
management consultants, with seven leading City advisory
firms receiving £16 million in fees from the regulator last
year.

PricewaterhouseCoopers received the most fees from the FSA
in 2009, according to figures published today. Britain’s
largest accountant charged £7.6 million for providing
training, advice on technology outsourcing and investigative
expertise for enforcement activities.

Ernst & Young, PwC’s “big four” rival, received £4.3 million
for a range of services, including strengthening the
security of the FSA’s computer systems and improving its
processes for conducting policy analysis.

Other big firms paid more than £1 million in fees by the
regulator last year were Deloitte, BDO Stoy Hayward and PA
Consultancy.

The figures were released after a Freedom of Information
request by Citywire, a financial news website. According to
the FSA’s response, it spent £16.1 million with its seven
key advisers in 2009, although it did not include fees paid
to smaller consultancies. Its spending on external lawyers
was not included.

The FSA declined to comment on the figures and would not
provide an historical comparison. However, the agency’s
spending on outside advisers is believed to have jumped
sharply since the fianancial crisis. The FSA was criticised
for failing to prevent huge bank losses and has responded by
overhauling its operations to take a tougher approach to
overseeing financial institutitions.

Alan Leaman, chief executive of the Management Consultancies
Association, defended the FSA’s use of consultants. “Since
the onset of the financial crisis, the FSA has undergone
significant changes in the way it runs its business,” he
said.

“Financial regulation is a hugely complex and quickly
changing area, demanding the highest standards, so it makes
every sense for the FSA to engage highly qualified experts
to work with it.”

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