MATT DICKINSON

The value of fines handed out by the Financial Services Authority has fallen to its lowest level in six years.

The FSA issued £5.3m worth of penalties this year, according to figures published on its website. That compares with £13.3m in fines given out during 2006, and is the lowest level since the 2002 total of £7.4m.

The average size of the fines also fell to its lowest level since at least 2002, dropping to £232,000 this year - a fall of 51% on last year's total of £475,000.

The average fine for the five years to the end of 2006 was £712,000.

However, the number of penalties handed out this year, 23, was above the average of 21 over the previous three years.

The biggest fine of 2007 was the £1.26m levied on insurance group Norwich Union earlier this month for failing to protect its customers against fraud.

Next was Nationwide Building Society, hit for £980,000 for sub-standard information security systems which came to light after a laptop was stolen from an employee's home.

This year is the first for six years in which the FSA has failed to hand out a multi-million-pound fine.

A fine of £6.4m was imposed on Deutsche Bank in 2006 for market misconduct, the third- biggest penalty ever issued by the UK's financial watchdog.

In 2004, Royal Dutch Shell was hit with a £17m penalty in the wake of mis-statements about oil and gas reserves in its accounts, and a year later Citigroup was fined £13.9m for a bond trade which disrupted the European financial markets.

A spokeswoman for the FSA said officials took action where there were breaches.

"We do a lot of other things that we are unable to talk about," she said.

In October, the regulator launched a new effort to stamp out insider trading in the City - individuals trading shares or other securities after receiving privileged information - when it branded hedge funds "complacent" in their attitude towards the white-collar crime.

It followed a study earlier this year which found that the FSA devoted less than 10% of its resources to tackling financial crime, despite fears of rising levels of insider dealing.