The Financial Services Authority's new hard-line approach saw it issue 46 fines amounting to a record value of £33.6 million last year. According to its 2009/10 annual report, the regulator also successfully completed two criminal prosecutions in the fiscal year ending in April. The implementation of its revised authorisation framework for senior management was also revealed to have led to 377 interviews being conducted, resulting in 27 applications being withdrawn. With 537 additional staff having been recruited during the year and 26 fines totalling £48.95 million already having been issued in 2010/11 to date, the FSA's more intensive model of regulation shows no sign of relenting.

Charities have also benefited from the activity of the regulator. Hector Sants, chief executive of the Financial Services Authority, was awarded a £108,000 bonus for his efforts in rebuilding the reputation of the City watchdog which he promptly declared he was donating to worthwhile causes. Lord Turner, the FSA's chairman, received a pay rise of more than 100pc with total compensation of £482,000 for 2009, up from £247,000, according to the regulator's annual report. Lord Turner said in a statement: "I and the board of the FSA are certain that we have covered an enormous distance over the last three years, that we are better equipped to identify and manage prudential risks and that we have now launched an essential shift in our conduct risk approach."

A financial crisis would happen only once a century if banks were forced to boost their capital cushions by 5 percentage points, according to research by a leading thinktank. Ray Barrell, of the National Institute of Economic and Social Research, said raising the amount of capital and cash held by banks from 2007 levels would reduce the risk of a banking crash from one every 19 years to one every 100. Rejecting suggestions that the current financial crisis was different from all the rest, he said: "Crises have enormous similarity and regulators have to take account of that. The more capital and liquidity you have the less likely you are to have a crisis."

The housing market plateau’d in May, with a fall recorded in both the number of homes sold and the prices achieved. According to Acadametrics, there were modest price falls in every region in England and Wales contributing to a 0.2% decline overall. Meanwhile, the number of properties sold in May fell by an estimated 18% from April levels. Dr Peter Williams, chairman of Acadametrics, said market conditions had been influenced by both the suspension of Home Information Packs and the announcement of a rise in Capital Gains Tax on property investments. "Together, these propelled more homes onto the market and thus adjusted the demand/supply balance," he added.

The Bank of England's Monetary Policy Committee has voted to keep the official bank base rate of interest at 0.5% for the fifteenth month in a row. With the economy still relatively weak and the new coalition Government set to deliver an emergency Budget on 22 June, the decision to leave the rate at its record low for at least another month comes as little surprise, despite recent high levels of inflation. The Bank also announced that it is to maintain its programme of quantitative easing at its present level. The last time the initiative was enlarged was November last year, when the addition of a further £25 billion took its total value to date to £200 billion. Barry Naisbitt, chief economist at Santander UK, said the MPC would be watching new economic data very carefully to see whether it was meeting its expectation of the likely development of inflation and output. "Recent indicators, such as survey indicators of output, show a reasonably positive picture of economic activity, and GDP growth in the first quarter has been revised up from 0.2% initially to a slightly healthier 0.3%," he added. "Of course, inflation at 3.7% is well above its target, but this is largely due to temporary factors and the Bank of England expects it to move back towards the 2% target as the year progresses."

Mortgage costs are plummeting with fixed-rate deals falling to a record low in May thanks to growing competition among lenders, the Bank of England said yesterday. Average interest rates charged on a two-year fixed-rate deal for a borrower with a 25 per cent deposit dropped to 3.8 per cent during the month. Lenders have been under increasing pressure to cut their rates because the Bank of England has kept the base rate at a record low of just 0.5 per cent since March 2009. Rates charged on the loans have been falling since last September, when they reached 4.47 per cent, and are now at their lowest level since the Bank’s records began in 1995.

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