I remember seeing a straggly white-haired academic type vent his spleen on the Financial Services Authority on BBC News a few months ago. The man, an American economist, was energetic in delivering his verdict on how the UK’s City regulator and the Securities and Exchange Commission, its American brother, had handled market abuse during the economic crisis. He seemed angriest with the ‘toothless’ FSA, as he described it, and summed up his feelings in a New York drawl: ‘Don’t ever talk to me again about the FSA.’ A few months after this interview, the Tories threatened to scrap the FSA altogether and return regulatory power to the Bank of England.

But the FSA has, as one would expect, carried on as normal. It has been particularly effective on the public relations front: lots of announcements of ‘cracking down’ for ‘deterrence’ purposes. And, of course, one of the things that makes a good headline – and reassures worried readers that the baddies are being caught – is a naughty company getting a great big fine.

This becomes a hollow exercise when that fine goes unpaid. It completely undermines all the good work that the authority has done. In the case of Fox Hayes, the FSA was especially proactive: in the Court of Appeal, it challenged a ruling of its own watchdog, the Financial Services and Markets Tribunal, and by doing so, managed to bump the original £146,000 fine up to £955,000. I do not want to estimate how much the FSA spent on legal fees in mounting that challenge, but I am sure that £955,000 would have gone some way to covering its costs (and maybe even left a little spare).

The FSA does not take taxpayers’ money; instead, it levies a fee on all the companies it regulates. But I’m not too sure that the good guys – struggling as the recession wears on – will be too happy about this.