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Monday, July 8, 2013

UK Govt Response on Banking Standards

The Parliamentary Commission on Banking Standards final report is supposed to change banking for good and after reading what has been published, it definitely looks like a game changer for rogue bankers, let's take a look. 

Ball & Chain for Bankers
There are some hard hitting recommendations in the report that is for sure and George Osborne is going in fully armed and hostile on bankers that test the new misconduct rules. There is going to be a whole swag of recommendations that will be passed into the Financial Services Bill and some of the following are quite sobering sanctions.
  • The government recommends introducing criminal sanctions for reckless misconduct.
  • Full recovery of remuneration as a outcome of misconduct.
  • The regulators will also be able to reach into an organisation and take disciplinary action against any individual involved in misconduct.
  • There is going to be a new range of metrics and risk factors that will be used to determine remuneration.
  • Discretionary power of the regulator to recover deferred remuneration in the case of reckless acts.
  • There will be explicit discretionary power to render void and cancel payments from the bank to an employee.
In the entire report, there are 114 recommendations spanning miss-selling to corporate governance which are going to change the landscape of banking in the United Kingdom and for some bankers, their regulator environment  has become a lot more precarious.

The report can be downloaded from this [ LINK ].

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