The FSA has admitted that regulatory compliance costs for brokers and insurers have risen since it took over the responsibility for regulation in December 2001.
According to Bloomberg, FSA executive chairman Howard Davies said: "We accept that compliance costs have risen in the last few years".
In a survey conducted by Europe Economics 40 out of 52 firms polled said compliance costs were rising as a result of FSA regulation.
Around half estimated that the expense of FSA regulation added up to 2% to operating costs, while 14 firms estimated regulation had fuelled increases of between 2% and 10%.
Firms blamed supervisors' inexperience and the difficulty of obtaining individual guidance from the FSA, as the main reasons for increased costs.
