Commenting on the publication of the Final Report, the Chairman of the Parliamentary Commission on Banking Standards, Andrew Tyrie MP, said: "Recent scandals, not least the fixing of the Libor rate that prompted Parliament to establish this Commission, have exposed shocking and widespread malpractice. Prudential and conduct failings have many shared causes but there is no single solution that can restore trust in the industry. The Final Report contains a package of recommendations that, together, change banking for good.
"Rewards for success should be better focused on generating long-term benefits for banks and their customers. Where the standards of individuals, especially those in senior roles, have fallen short, clear lines of accountability and enforceable sanctions are needed. They have both been lacking.
"It is not just bankers that need to change. The actions of regulators and Governments have contributed to the decline in standards. Governments need to get on with the job of implementing these reforms. Regulators and supervisors need rigorously to enforce them. We need better regulation: this may mean less, not more. High standards will strengthen Britain as a global financial centre. International co-ordination, while desirable, should not be allowed to delay reform. We must get on and do what is right for the UK."
The Commission's Final Report, 'Changing banking for good', contains a package of recommendations to raise standards. Key recommendations are:
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a new Senior Persons Regime, replacing the Approved Persons Regime, to ensure that the most important responsibilities within banks are assigned to specific, senior individuals so they can be held fully accountable for their decisions
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a new licensing regime underpinned by Banking Standards Rules to ensure those who can do serious harm are subject to the full range of enforcement powers
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a new criminal offence for Senior Persons of reckless misconduct in the management of a bank, carrying a custodial sentence
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a new remuneration code to align better risks taken and rewards received in remuneration, with much more remuneration to be deferred and for much longer
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a new power for the regulator to cancel all outstanding deferred remuneration, along with unvested pension rights and loss of office or change of control payments, for senior bank employees in the event of their banks needing taxpayer support.
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