Banks in Britain do not have effective anti-bribery and corruption controls and the financial regulator is considering referring some for further investigation and possible fines.

Despite the introduction of the draconian Bribery Act last year, the Financial Services Authority (FSA) said on Thursday that nearly half of banks it visited as part of a review failed to mitigate these risks adequately.

Overall, despite the high profile of the issue, the investment banking sector has been too slow and too reactive in managing bribery and corruption risks, Tracey McDermott, acting director of enforcement and financial crime, said.

After spot checks on 15 firms, including eight global investment banks, the FSA said most groups failed to take proper account of anti-bribery and corruption rules and that management information on these risks was poor.

The FSA also highlighted significant issues in companies' dealings with third parties used to win and retain business and said only a few firms had processes to ensure gifts and expenses to particular clients were reasonable on a cumulative basis.

Only two firms visited had either started or carried out specific anti-bribery and corruption audits.

The FSA is considering whether further regulatory action is required in relation to certain firms in its review, it said.

The Bribery Act, which came into force last July, caused a furore when it introduced a new offence of failure to prevent bribery, which makes businesses with any UK interest criminally liable if staff, subsidiaries, intermediaries or associated persons offer bribes across the world.

The act, which is enforced by the Serious Fraud Office, also clamps down on facilitation payments and disproportionate hospitality to oil the wheels of business. Companies risk unlimited fines if they breach rules. Guilty individuals face up to 10 years in prison and unlimited fines.

The FSA's remit is limited to institutions' systems and controls. If the regulator were to find wrongdoing, it would refer the matter to the SFO or the Serious Organised Crime Agency (SOCA), a specialist police unit.

(Reporting by Kirstin Ridley; Editing by Mark Potter)