The government should look at re-routing bank fines to help charities doing important work in their communities, NPC chief executive Dan Corry has said.

The Financial Conduct Authority has announced more than £1.11bn in fines against five major banks for manipulating spot market foreign exchange rates for the G10 currencies. Fines have also been levied in the US and Switzerland.

Corry said that with unprecedented levels of public money going into “propping up” the banks since the financial crisis, it was good to see the government taking serious action on misconduct.

But it is “time to make sure that some of the money raised by the fines reaches the communities hardest hit by the recession”, he said.

“Small, local charities, often working in areas of deprivation, have played a key role in holding communities together,” Corry said. “The reduction in local authority funding means that they are already facing a struggle to stay afloat, and even a small proportion of the billions levied against the banking sector today could secure charities' future for years to come. Where these charities are doing effective, important work, the government should help them.”

The FCA has worked closely with other regulators in the UK, Europe and US on the case. Citibank N.A. has been fined £225.6m, HSBC Bank Plc £216.4m, JPMorgan Chase Bank N.A. £222.2m, The Royal Bank of Scotland Plc £217m, and UBS AG £233.8m.

“Re-routing fines to those affected by the initial wrong-doing would show a welcome commitment to social fairness. Hopefully the government can examine the role of other regulators, to see [if] this can become the norm for regulatory fines,” Corry said.

The FCA said an investigation into Barclays Bank Plc covering its G10 spot FX trading business and wider FX business areas will be progressed.

Last month the government announced charities would benefit from almost £10m in funding arising from fines on banks for Libor rigging.

The Cabinet Office said more than £8m would go to English charities, with the rest made available to the Scotland, Wales, and Northern Ireland governments.

Last week Chancellor George Osborne said the government would refund the expected VAT of up to £1.1m from the sales of poppies used at the First World War commemorative installation at the Tower of London using some of the Libor fines.

The government will donate an amount equivalent to the expected net VAT receipts from the sale of the poppies to six charities who support injured armed services personnel and their families. Cobseo; Combat Stress; Coming Home; Help for Heroes; The Royal British Legion; and Soldiers, Sailors, Airman and Families Association will benefit from the donation.

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