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Banking commission: Scrap approved persons regime and create criminal offence for bankers

Andrew-Tyrie-600x385.jpg

The parliamentary commission on banking standards is calling for the approved persons regime to be scrapped for banking staff and replaced with a two-tier system.

In its long-awaited final report, published this week, the commission says the current regime is a “complex and confused mess”.

It proposes the creation of a senior persons regime for top management which would make it easier for regulators to hold individuals to account.

It also calls for a licensing regime that would cover most other bank staff and subject them to a revised set of banking standards.

The commission also recommends the creation of a criminal offence for “reckless misconduct in the management of a bank”, which would carry a prison sentence.

Commission chair Andrew Tyrie says: “Replacing the discredited approved persons regime with the senior persons regime would create meaningful lines of personal accountability, changing behaviour and making enforcement against individuals easier.”

Ethics Foundation founder David Jackman says: “This is an excellent idea. The approved persons regime is costly for what it achieves. We need a meaningful licensing system with teeth and individual responsibility.”

An FCA spokesman says: “The FCA is placing a far greater emphasis on individual responsibility and we will hold people to account when things go wrong. This is a key regulatory focus for us. 

“We continue to look at what further steps we can take to strengthen that part of the regulatory regime and the report’s recommendations will be part of that.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. When will we see the politicians, responsible for the regulatory structure that failed and the regulator, that fell asleep at the wheel, in the run up to the financial crisis, brought to account?

  2. I wonder if they smile while they say it....? 19th June 2013 at 9:59 am

    “An FCA spokesman says: “The FCA is placing a far greater emphasis on individual responsibility and we will hold people to account when things go wrong. This is a key regulatory focus for us.”

    He should have gone on to say – “Er, but this personal accountability malarchy will not of course apply to us.”

  3. How about the creation of a criminal offence for Reckless Stupidity?

  4. Does anyone seriously believe that Bankers indulged in “reckless misconduct in the management of a bank” knowingly, willingly and on purpose? Surely this is as a result of incompetence and perhaps stupidity as well.

    Therefore it would appear that these failings are now going to be a criminal offence. In which case no doubt a good many MPs and cabinet members are about to find themselves in jail.

    The Regulators of course (as others have so aptly pointed out) neatly avoid these sanctions as they are currently answerable to no one. If as proposed they become accountable to the TSC, will these sanctions also apply to them? I’ll bet it won’t.

  5. Sorry Harry, but I think you’re being incredibly naive if you think that it was incompetence that led to the ‘reckless misconduct’ of Bankers in the run up to the crash in 2008.

    Bankers knew exactly what they were doing.

  6. @Smithy.

    Any evidence for that assertion?

  7. @ Sam De Zoysa

    Yes, plenty.

    Staart with ‘Too big to fail’ by Aaron Sorkin, and then ‘The Big Short’ by Michael Lewis.

    Both explode the myth of incompetence.

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