It recommends a new criminal offence for “senior persons” who run banks in a “reckless manner”, as well as much more stringent clawback rules that could see managers being stripped of several years’ worth of pay.
Andrew Tyrie MP, the chairman of the Commission on Banking Standards, warned
that bankers had escaped “personal responsibility” for their actions, and said
that drastic reforms were the only way to restore trust in banks.
“Where the standards of individuals, especially those in senior roles, have
fallen short, clear lines of accountability and enforceable sanctions are
needed,” Mr Tyrie said.
Among the main recommendations of the 570-page report are:
• A new regime for approving “senior persons”
• Up to 10-year deferrals of bonuses
• A criminal offence for running a bank in a “reckless manner”
• The cancellation of all bonuses for managers if a bank “requires direct taxpayer support”
• A government inquiry into the break-up of Royal Bank of Scotland. It said RBS was holding back Britain's economic recovery and ministers should consider breaking it up into a good and bad bank.
The report is the fifth and final publication by the commission, whose members included Justin Welby, the Archbishop of Canterbury; Lord Lawson, a former Chancellor of the Exchequer; and Lord Turnbull, a former head of the Civil Service.
The commission was set up last year in the wake of the Libor-rigging scandal.
Recommendations requiring legislation are expected to be added to the Banking Bill that is currently going through Parliament, meaning a criminal law for bankers could be in place before the end of 2015.
Under the new system, senior managers would have to sign up to a new code of conduct and, according to the commission, would be “fully and unambiguously aware of those responsibilities”.
The British Bankers’ Association said the document was the “most significant report into banking for a generation” and would help UK lenders become the “gold standard for professionalism and integrity”.
• A criminal offence for running a bank in a “reckless manner”
• The cancellation of all bonuses for managers if a bank “requires direct taxpayer support”
• A government inquiry into the break-up of Royal Bank of Scotland. It said RBS was holding back Britain's economic recovery and ministers should consider breaking it up into a good and bad bank.
The report is the fifth and final publication by the commission, whose members included Justin Welby, the Archbishop of Canterbury; Lord Lawson, a former Chancellor of the Exchequer; and Lord Turnbull, a former head of the Civil Service.
The commission was set up last year in the wake of the Libor-rigging scandal.
Recommendations requiring legislation are expected to be added to the Banking Bill that is currently going through Parliament, meaning a criminal law for bankers could be in place before the end of 2015.
Under the new system, senior managers would have to sign up to a new code of conduct and, according to the commission, would be “fully and unambiguously aware of those responsibilities”.
The British Bankers’ Association said the document was the “most significant report into banking for a generation” and would help UK lenders become the “gold standard for professionalism and integrity”.