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PRA chief says lack of charges against failed bank directors ‘more than odd’

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Prudential Regulation Authority chief executive Andrew Bailey has claimed it is “more than odd” that senior directors at the helm of failed banks have not faced charges.

According to The Telegraph, Bailey told an audience at yesterday’s Future of Financial Services summit that it is a “source of some surprise” to him that authorities have brought cases against junior bankers but not senior directors.

He said: “It is to my mind a very striking observation and difficulty with the crisis that no formal action has been taken against any chief executive or any chairmen of a failed institution. Not because I have a personal vendetta against them but it is more than odd that action has been taken against people lower down institutions but not at the top.”

Bailey reportedly said bosses have been protected so far because there is a “problem with trail evidence” that could convict senior bankers, adding it is evidence of a “flaw in the system” that allows bosses to “delegate responsibility as well as tasks”.

His words follow reports that business secretary Vince Cable has asked officials to investigate whether three former HBOS directors could be banned from working as company directors.

Earlier this month, the parliamentary commission on banking standards published a report into the “catastrophic failure” of HBOS in which is called for ex-chairman Lord Stevenson and ex-chief executives Andy Hornby and Sir James Crosby, who was also former FSA deputy chairman, to be banned from working in financial services.

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Comments

There are 18 comments at the moment, we would love to hear your opinion too.

  1. “More than odd” doesn’t even begin to cover it.

    Whilst everyone is innocent until proven guilty, I believe it is essential that a thorough investigation is undertaken with a view to bringing formal charges where appropriate.

  2. Wow, a regulator that said something sensible. I like this PRA!

  3. Not odd at all. schoolboy rule no.1 “Do not dob your mates in”
    IFAs’ on the other hand…….

  4. The problem may be that, historically, senior figures who engage in, say, the criminal world of organised crime etc. tend to try to insulate themselves, as much as possible, from what is happening at the sharp end of the business, so prosecutions are difficult to mount against them. Remember Al Capone was never convicted of murder even though he gave the orders. He went to jail for tax evasion.
    Of course I’m not comparing senior bank figures with any type or ‘organised’ crime.
    Well…not much anyway.

  5. Get them into the courts and let the courts decide what is right.

  6. its not odd at all what’s new if you are at the top then they don’t seem to pursue you if you were a working class benefit cheat they would spend hundreds of thousand trying to convict you the bankers who caused the crash should be brought to book and put in prison where they belong as they have caused untold harm and misery to everyone in this country i personally doubt anyone will ever actually be held responsible in my lifetime.
    as it seems money is still the root of all evil.

  7. I, too, fail to understand why no director of any bank has been interrogated about the fraudulent selling of insurance policies to ‘captive’ borrowers. If this isn’t a crime (12 billion and rising) what is?
    If the law permits directors to escape punishment for crimes occurring on their watch, it needs changing now.

  8. But what is even odder is that despite a stream of such comments to the same effect in the press , on forums like this, for years the old regulator did nothing at all. So what did they do other than pursue the small guy for things that were out of their control .Oh and where is their old boss working now ? Yes very odd ….not!

  9. I agree but it is a shame also that we cannot bring charges against those at the top of the failed regulator as well.

    Hector Sants has been rewarded with a reported £3 million a year job at Barclays and a knighthood.

    Accountability and responsibility has to begin at the top.

  10. My mouth feel open when I read this. A regulator applying commonsense and actually talking sense. A breath of fresh air

  11. Accountability and resposibility???

  12. Mr Bailey may have just talked himself out of a cushy banking job post PRA.

    Well done for finally admitting what we have all known all along.

    If this is followed up with action, the obligatory knighthood that folows may, for once be actually deserved.

  13. To be honest “words” are just words at the end of the day, what I am looking for is some sort of action,
    Since the PRA and FCA have come into being I have heard some encouraging words and statements, then why do I feel they are just throwing me a bone to keep me quite ?

    Nothing will change if no real action is taken, the whole industry is a mess from the inbreeding at the top (regulators included) to the mushroom farms at the bottom (kept in the dark and fed on Sh1t)

  14. Sir Wilf Fagbutt 16th April 2013 at 11:26 am

    He won’t rock the boat !!!

  15. Sir Wilf Fagbutt 16th April 2013 at 11:46 am

    Forgot to mention having lunch with Andrew next week.

    Cracked Lobster with a rather cheeky Montrachet followed by Roast Partridge with a nice bottle of Petrus and perhaps a glass of LouisXVI with coffee should sort out any silliness.

  16. Absolutely spot on. Mr Bailey is to be congratulated. Even if everyone is proven “innocent” some visible action should have been started ages ago if only to give the public the illusion that people were being held responsible.

  17. Lets face it – it’s a merry go round – politicians, Bank of England, FSA, Directors of the Major Banks – they’re all in cahoots with each other – all offering jobs to each other. I would be delighted to see the big bank cheeses fined and in the dock. But that unlikely to happen given that they’re all in it together – pillaging all they can take – blaming the little people who ultimately always cop it

  18. I agree with Michael Falls ~ why hasn’t anyone at the FSA been brought to book for dereliction of duty? After all, wasn’t one of the primary responsibilities of the FSA to prevent reckless behaviour that could lead to significant consumer detriment?

    At his appearance before the TSC in March 2011, Hector Sants was asked repeatedly to name names within the FSA yet repeatedly refused to do so, citing merely collective failure. The only one who was named was Clive Briault and look what he got ~ a £612,000 golden parachute paid for with OPM. And, for his part in it all, Hector Sants got a knighthood.

    It all smells very bad doesn’t it?

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