Introduction

Michael Grimwade

“The farther back you can look, the farther forward you are likely to see.”

Winston Churchill, twice British Prime Minister during the 20th century

I joined Lloyds TSB as Wholesale & International Operational Risk Director in May 2004. This was just nine months after the firm had received what was then a record fine of £1.9 million from the Financial Services Authority for the mis-sale of its Extra Income and Growth Plan, or “precipice bonds”, as the tabloids more pejoratively called them.¹¹Lloyds TSB’s £1.9 million FSA fine relating its “Extra Income and Growth Plan”, September 24, 2003. Lloyds TSB had also agreed to pay a further £98 million in compensation regarding 22,500 sales of this product. A shocking event for the firm at the time.

Only a dozen years later, however, the new record fine²²This fine was levied by the Financial Conduct Authority, one of the FSA’s two successors. in the UK (for Barclays this time) was 150 times larger.³³Barclays’ £284.4 million FCA fine relating to misconduct in the FX markets, May 20, 2015. Separately, as at the end of 2015, an enlarged Lloyds Banking Group had established a provision for PPI compensation that was 160 times⁴⁴Lloyds