The Commission's report - which spans nine volumes - represents a fantastic opportunity for UK banking to be reset and rebalanced to avoid the severe economic unstability and massive consumer detriment which the previous and existing regimes have caused. GLC hopes the UK Government will take on board the Commission's recommedations as soon as possible and practicable. Some of the key recommendations include:
- a proposal for a new framework including a Senior Person Regime: where banking executives should be accountable for the risks they take. Recent UK failures show that directors have been able to sidestep any real individual responsibility for their actions;
- a proposal within the new framework that stipulates that employees covered by the proposed licensing regime should adhere to a new set of Banking Standards Rules to ensure those who do serious harm are subject to the full range of enforcement powers. Banking executives should be required to meet professional and ethical standards and where standards are not met there should be a mechanism for imposing appropriate sanctions with individuals held to account.
- a new criminal offence for Senior Persons of reckless misconduct in the management of a bank, carrying a custodial sentence. This will create a strong deterrence for reckless risk taking. Update: this afternoon the Prime Minister has confirmed that provisions for this new offence will be amended into the Financial Services (Banking Reform) Bill, which is presently before the House of Commons.