A resent report stated that senior bankers who commit reckless misconduct should face criminal charges and should be forced to fill in a great variety of legal documents, explaining their actions.
The view of the Parliamentary Commission on Banking Standards on this matter is that bankers in top positions should clearly lay down their responsibilities and in case of ignoring them they need to be sanctioned with prison sentences. HR policies should be applied here, as well.
The intention of these changes is to put an end to the tendency of people standing higher in the hierarchy to deny taking wrong decisions.
“Too many bankers, especially at the most senior levels, have operated in an environment with insufficient personal responsibility,” claims the report.
It also says these knew there would not be any consequences for their actions as they used either ignorance as an excuse or the fact that decisions had not been taken individually so no single person could be blamed.
The length of the report is 571 pages. There are many other recommendations trying to help the banking sector remedy its situation.
One of the suggestions towards banks is to change the way they estimate the bankers’ bonuses. The latter should not be deferred with more than ten years. When the time comes they have to be based on the work of the bank during this period.
This way, errant bankers would not be able to get their bonuses.
Another point in this report suggests that a new set of banking regulations has to be accepted. These would apply to such people whose position permits them to cause severe harm to the bank.
The Treasury has commented: “Where legislation is needed, we have said we will support it, and the banking bill currently before Parliament can be amended to ensure they are quickly enacted.”