Britain should bring a new law to jail bankers for ‘reckless misconduct’ and force bankers to wait up to 10 years to receive their bonuses, a report on banking commissioned by the government has recommended.
The Parliamentary Commission on Banking Standards, set up by Chancellor George Osborne last year, said deep lapses in standards had been commonplace and recent scandals had exposed "shocking and widespread malpractice".
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The cross-party group’s fifth report also called on the government to review alternatives for selling off the Royal Bank of Scotland (RBS), including breaking it up, and demanded action to make the banking market more competitive.
Commission’s chairman Andrew Tyrie said: "Taxpayers and customers have lost out. The economy has suffered. The reputation of the financial sector has been gravely damaged. Trust in banking has fallen to a new low."
"It is not just bankers that need to change. The actions of regulators and governments have contributed to the decline in standards," Tyrie added.
The committee also recommended the industry’s ‘approved persons’ regime be scrapped and replaced with two new registers – one for senior bankers and one for other bank employees. It said the new system would ensure the most important responsibilities within banks were assigned to specific individuals.
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By GlobalDataThe committee also criticised the failure of regulators to spot the risks building up in the financial system prior to 2008, demanding "the replacement of mechanical data collection and box ticking by a much greater emphasis on the exercise of judgement".
