Tougher punishments proposed to prevent another banking crisis
Wednesday 19 June 2013
The commission’s hotly anticipated report urges the Chancellor, George Osborne, to oversee the creation of a new offence of “reckless misconduct in the management of a bank”.
Were such an offence in place in the aftermath of the financial crisis, several banking leaders could have faced prosecution.
The parliamentary commission, which was established by Mr Osborne to reform banking after the Libor scandal, describes the failure of senior financiers to accept blame for their actions as “dismal”. It says new rules are required to force executives to take proper responsibility.
The report also calls for a new licensing regime for bankers, underpinned by strict rules to ensure traders and even branch staff who mis-sell financial products are faced with the full force of penalties open to Britain’s financial watchdogs.
The commission also recommends sharp increases in the fines levied on miscreant banks and bankers to bring penalties more closely in line with those imposed by American watchdogs, who hit HSBC with a record fine of nearly $2bn (£1.3bn) when they accused it of being a conduit for dirty money.
The report is released as Mr Osborne is expected to signal the first steps in selling off the Lloyds Banking Group and the Royal Bank of Scotland in his annual Mansion House speech this evening.