LONDON: Bankers found guilty of “reckless misconduct” in Britain could end up in prison and be stripped of bonuses, under draconian proposals yesterday to clean up London’s scandal-hit financial sector.
The Parliamentary Commission on Banking Standards, established by the government after the Libor rate-rigging scandal last year, made the recommendations in a final report that amounted to a blunt indictment of malpractice.
The scandals have besmirched the old and worldwide reputation of the City of London and made some bankers the target of public anger.
The Treasury welcomed the review, describing it as an “impressive piece of work”, adding that it would help the government “create a stronger and safer banking system”.
The Commission was formed last year after revelations that Barclays bank tried to manipulate the Libor rate, which is used as a benchmark for global financial contracts worth about $300 trillion.
“Under our recommendations, senior bankers who seriously damage their banks or put taxpayers’ money at risk can expect to be fined, banned from the industry, or, in the worst cases, go to jail,” Commission chairman and Conservative lawmaker Andrew Tyrie said in a report.
The report added: “A criminal offence will be established applying to senior persons carrying out their professional responsibilities in a reckless manner, which may carry a prison sentence.
The Commission, which included Archbishop of Canterbury Justin Welby, the Church of England’s spiritual leader, as well as lawmakers from across British political parties, recommended also that the state-rescued Royal Bank of Scotland (RBS) should be split into a so-called good bank and a bad bank. It also criticised the government for “political interference” in both RBS and Lloyds Banking Group.
AFP
