Perhaps its logic was that because big banks got us into this mess, they could pay the bill for providing tighter regulation in the future.
The FSA also decided not to clobber small firms, which was wise from a PR point of view.
This is not a good time to be heaping additional financial burdens on small businesses and I am delighted that many thousands of brokers will not have to contend with steep rises in fees.
But companies on the next rung of the ladder such as networks and large firms of directly authorised brokers will be hit hard. Many could see their fees rise by more than 100%.
That is an eye-wateringly large increase, especially at a time when business volumes are falling and there is little prospect of an upturn in fortunes.
Unfortunately, when organisations have a crippling cost increase imposed on them they often have little choice but to pass it on to their customers.
When the price of oil shot through the roof not long ago, airlines had to impose surcharges or face the prospect of going out of business, which a number did.
So what will the FSA’s swingeing fee increases be used to pay for? Among other things, it is planning to spend money hiring 200 more staff, taking its headcount to 3,000. It is also budgeting for a 3.3% pay rise for its staff, and to lavish an extra £1.2m on its communications budget. Sounds great, especially when others are paying.
Unfortunately, the firms that have to foot the bill face face some stark choices. They can either take the increase on the chin if their profits are capable of absorbing such a hit, they can pass the cost on to their customers or they can go out of business.
I suspect most businesses have already cut margins and budgets to the bone, leaving them little or no room to absorb these fee increases. Nobody wants to go bust so they will pass on the cost.
One consequence of this may be that fewer people seek independent financial advice at the time they need it most.
It’s cock-eyed thinking like the FSA’s that got us into this mess in the first place.