It was only a few weeks ago in this column that I was lamenting the feeble fines slapped on City wrongdoers. My complaint was that regulators were unlikely to encourage better behaviour when their penalties amounted to petty cash for the institutions and individuals they supervised. The problem is compounded when the potential reward for cheating is so much greater than the prospective fine if caught.

Since then, I have been berated by one senior City figure, who argues that the last thing we need is noisy City fines. The reason we have a pensions crisis, he says, is because no one has confidence in our financial institutions any more. Did I want to undermine public confidence and see the savings gap widen still further?

Of course not. But there is a reason why people distrust the long-term savings industry: so many have been repeatedly fleeced by it. The answer is not to hush up the industry's sins, but to punish it into better behaviour in future. Bigger fines would be a good start. So I suppose I should welcome the £14m penalty meted out to Citigroup by the Financial Services Authority the other day. It was the second-biggest fine ever from the FSA.

Citigroup's sin came to be known as the "Dr Evil" affair. Last summer the bank's London-based bond traders were instructed by their bosses to produce new strategies for making money. They came up with a computer program - which they dubbed Dr Evil (after Austin Powers's arch-enemy) - designed to stun Europe's government bond market by unleashing a wave of simultaneous sell orders. The panic would drive down prices and enable the dealers to pick up bonds on the cheap. The aim, according to one trader, who made the cardinal error of spelling it out in an internal e-mail, was to widen profit margins, add to the costs of competitors and drive smaller rivals out of the market.

It worked like a dream. On 2 August 2004, at 10.28am, the traders pressed the button on Dr Evil, and in the space of 18 seconds pumped out 188 orders to sell more than £8bn worth of bonds. Prices collapsed as rival traders panicked that Citigroup knew something they didn't. Some firms withdrew temporarily from the market. When the dust finally settled, Citigroup was £10m richer.

The FSA was not amused, describing Citigroup's failings as "very serious". But it stopped short of accusing the bank of deliberate manipulation, instead finding it guilty only of failing to conduct its business with due skill and care.

Will the public spanking of Citigroup lead to better behaviour in future? I wouldn't count on it. After its profits have been subtracted, the net cost to the bank was £4m - a sum it makes in profit every four hours. It is the most profitable bank in the world. The five guilty traders, who had been suspended on full pay since last August, are all being reinstated in their old jobs. While expressing "regret", the bank doesn't sound that sorry. It seems to want to play down the entire affair as a juvenile prank that went too far.

Proprietary trading - buying and selling securities as principal rather than as agent for a customer - becomes ever more important for the world's biggest banks. They are not making the money they used to from advising on mergers and acquisitions or in commission from securities dealing. Instead they rely on their army of in-house traders to make the right bets. The temptation to improve the odds by indulging in a bit of market abuse has never been greater.

Meanwhile, I'm not convinced the Citigroup case was the one where the FSA was right to unleash its biggest guns. The victims were all grown-ups - rival traders used to the rough and tumble of the wholesale securities markets and well enough endowed to shoulder the occasional bruising loss. The time for a seriously large fine is surely when an institution mistreats or cheats small, vulnerable retail customers.

The FCUK logo was a puerile joke that managed to annoy me in two opposing ways. First, by plastering the ubiquitous initials on a million T-shirts, French Connection did its bit to coarsen public life. But equally irritating, its marketing suits managed to hijack a fine Anglo-Saxon expletive and sanitise it.

I'm having the last laugh, however. French Connection has just issued its third profits warning in the space of seven months. Sales have fallen off a cliff. Analysts say French Connection is badly positioned, trying to sell unexciting ranges at high prices. The FCUK slogan just became too commonplace, putting off fashion shoppers looking for a hint of exclusivity. The only disappointment is that French Connection's founder, Stephen Marks, the man responsible, has not taken more of the pain. With perfect timing, he sold £40m worth of French Connection shares at the top of the market, just before the downturn began.

Patrick Hosking is investment editor of the Times