BoE calls for accountability reforms
11/06/2015
The governor of the Bank of England (BoE), Mark Carney, has claimed that senior mangers of banks and building societies will be held directly accountable for failures in their institutions.
From next year, individuals will be held accountable for their own conduct and firms will be required to take a greater responsibility for market practices, Mr Carney has said. As well as this, new regulations to close gaps in regulatory coverage and broaden the way senior mangers are held to account.
Carney also said that criminal sanctions should be updated, market abuse rules extended and maximum prison terms lengthened.
In his speech, Carney highlighted how the changes will be made to help introduce standards of market practice and will be widely followed and understood in the business. He said:
"These sanctions, while necessary, aren’t the solution, not least since the $150 billion of fines levied on global banks translates into more than $3 trillion of reduced lending capacity to the real economy.
If firms and their staff fail to take this opportunity [to improve their practices], more restrictive regulation is inevitable.
"To give these measures teeth, key elements of the Senior Managers Regime should be extended to all firms active in wholesale FICC markets, including dealers and asset managers. That means all senior managers would have clearly defined responsibilities and would be answerable for training, certifying and monitoring the material risk takers they supervise. The FCA should oversee compliance, redeploying resources to focus on Senior Persons. In turn, these individuals would be on the hook for promoting compliance within their organisations. Incentives will be aligned."
Chancellor George Osborne has endorsed these changes, claiming:
"Our financial services industry in Britain has, in recent years, been seen as part of the problem – now it must become part of the solution."
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Tougher penalties for non- payment of National Living Wage
02/09/2015 When the National Living Wage is introduced in April 2016, the government will also implement harsher penalties for employers who do not pay their workers the £7.20 an hour minimum. These penalties will be tougher than the ones faced by employers at the moment for not paying workers minimum wage, which stands at £6.50 an hour. A new team will be established within HMRC to pur...
Read MoreChanges needed to use of personal data, says Government
08/12/2014 A government taskforce has called for a change in the way companies trade customers personal data, as they believe it is currently “out of control”. The taskforce has called for a £500,000 fine to be applied to companies if they break the rules, and to hold company directors entirely responsible for nuisance calls. They have also called for a change in the way consumers c...
Read MoreAre We Set For Credit Crunch Part 2?
Investors in both the UK and US were running scared yesterday as rumours rampaged through the markets that more security firms in the US will be writing down the value of their loan books when the reporting seasons starts next week. For those who have been watching the credit crunch closely, this was the reason that we saw the initial shock last year which led to the worldwide economic slowdown....
Read MoreRain stops play in English gardens
With this summer being perhaps the wettest on record, Brits are neglecting their gardens, according to new research.The study by Legal & General showed that 67 per cent of those questioned were not going to be buying anything for the garden this summer.Usually, during the summer months, the garden is a focal point of household spending but after the recent wet weather only ten per cent said they w...
Read MoreUK manufacturing slows in November
The Purchasing Managers Index (PMI), a prominent indicator of the manufacturing industry, fell from 53.4 in October to 51.8 in November amid signs of a slowdown in the UK manufacturing sector. When you add this together with the slowdown in the services sector, expected slowdown in the property sector and a lack of overall liquidity in the money markets the signs are there for a further slowdown i...
Read More