Bankers wriggle out of plans to make them criminally accountable

Bankers were going to be made more accountable – but now they’re not (sort of)

Plans to make bankers more accountable for their company’s actions have been watered down, and will now only affect a select few.

The Financial Conduct Authority’s proposals were designed to make board members who contribute to banks’ criminal activity liable.

The new regulations aimed to prevent the situation happening again where following the financial crisis very few individuals were held accountable for risky behaviour which led to banks collapsing or being bailed out.

It was supposed to affect all board members, including non-executive directors (NEDs), however, thanks to lobbying from the financial industry, only the chairman, senior independent director and those who sit on board committees will be included.

Why have NEDs been removed?

Martin Wheatley, chief executive of the FCA, said: “Non-executive directors play a vital role in providing challenge to and an independent oversight of the executive directors.

“Including all NEDs in the new regime would risk the unintended consequence of changing the whole nature of this vital role.”

Thanks Wheatley, you’ve explained that so well.

Executive director of the British Bankers’ Association, Simon Hills told the Guardian making NEDs criminally liable would encourage them to get too involved in the running of the bank.

“It is welcome that the regulators have responded by adapting their proposals to only include those senior non-executive directors who have specific responsibilities. This should ensure that bank boards still retain non-executives who are able to provide constructive but critical advice to the bank’s executive.”

However, the Institute of Directors said the proposed rules were still too harsh.

FCA investigations up

Meanwhile, FCA investigations are up 20% in a year, from 90 in 2013 to 109 in 2014, however the number closed without a public outcome has risen too.

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Readers' comments (2)

  • “Non-executive directors play a vital role in providing challenge to and an independent oversight of the executive directors."

    Oh yeah? So where were they when every major bank was indulging in reckless speculation in the run-up to the 2008 crash?

    Bankers wreck the economy, cash in their bonuses, and walk away with a golden handshake into another top job where there is no disincentive for them to do the same again.

    Until we see suits in the dock, like they do in Iceland, we are doomed to re-live the same history again and again.

    Bang the bastards up!

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  • Heare we go again one law for the rich and another for the rest of us.
    Why is it that the city bankers can get away with bad behivor, but the the comman man is held to account.
    The politatons seem to be in the pockets of the city men who can buy what they want.
    I will be voting for a party that serves the publick not the money men.

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