The number of staff being sacked or suspended at financial institutions for reasons such as wrongdoing has reached a five-year high, figures have revealed.
Data obtained through the Freedom of Information act show that last year, 1,373 individuals were dismissed or suspended from financial services jobs in Britain – a 76pc rise on the previous 12 months. The figures exclude staff who lost their jobs through general redundancy schemes.
The finding comes after a succession of financial scandals and efforts by regulators to clamp down on misdemeanours.
The Financial Service Authority’s efforts to crack down on market abuse has led to a wave of sackings and suspensions where employers no longer tolerate wrongdoing, according to Pinsent Masons, the law firm that obtained the figures.
The threat of enforcement and reputational damage associated with rogue traders such as Kewku Adoboli are “clearly having an impact”, according to Helen Farr, a partner in the financial services team at Pinsent Masons.
She said: “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 figures also show that the number of job losses in the financial services industry has reached its highest level since the peak of the financial crisis in 2008. Some 36,868 people lost their jobs in 2012, bringing the total number of individuals who have left their posts in the past five years to 177,697.
Ms Farr said: “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.”
The FSA, due to be replaced later this year, has beefed up its efforts to tackle market abuse over the last few years, successfully prosecuting a number of high-profile insider dealing cases.
Last year also saw a string of bank scandals, including mis-selling of financial products and the manipulation of global benchmark interest rates, as well as the prosecution of former UBS trader Mr Adoboli for the biggest fraud in British history, which cost the Swiss bank $2.3bn (£1.43bn).
Banks worldwide are shedding jobs as stricter regulations and euro zone worries take their toll on trading income and investment banking operations.
The scale of the UK’s demise in City jobs was laid bare earlier this month by figures showing the number of frontline workers in the banking industry has fallen to an eight-year low.
Analysis of the FSA’s database by corporate finance boutique IMAS, shows that people employed in frontline jobs by banks have fallen by nearly 20,000 since the financial crisis, to just under 152,000 – the lowest level since the summer of 2004 and down from a peak of about 170,000 in mid-2007.