Chairman of the Treasury Select Committee Andrew Tyrie MP has criticised the Financial Services Authority for failing to fine the Bank of Scotland.

The FSA failed to issue a fine to the Bank of Scotland last week despite describing it as ‘guilty of very serious misconduct’, instead issuing a public censure.

But Mr Tyrie said: “Given that fines are used to reduce the FSA levy on other firms, the decision not to impose one in this instance amounts to a transfer from the financial community, whose levy would have been lower had there been a fine, to the shareholders, both Government and private.

“The Committee will want to look carefully at the reasons for the FSA’s decision.”

The reason given by the FSA was that as taxpayers had already had to bail out the bank, using public funds again for a fine would mean taxpayers paying twice for the same mistakes.

It said the fine would have been ‘substantial’ but Mr Tyrie wants clear figures to be given as a deterrent to other firms.

“Given the deterrent role for a fine it would also have been helpful if the FSA could have given us an idea of the scale of the fine it would have imposed.”

The FSA has agreed to release a public report into the failings of the bank but this will not take place until current enforcement proceedings against the bank are complete.

Mr Tyrie praised the FSA for agreeing to produce a report and hoped a report would be issued soon.

“This enforcement action could drag on. The lessons of HBOS need to be set out as soon as possible, and preferably before the new regulatory system takes effect at the beginning of next year, ” he said.