Bank of England to step up oversight of bankers

Tuesday 29 July 2014 16.32
The Bank of England is publishing final rules on clawing back bonuses paid to bankers caught up in misconduct
The Bank of England is publishing final rules on clawing back bonuses paid to bankers caught up in misconduct

Britain's most senior bankers will become directly accountable for their actions under new proposals from regulators. 

Those found to be behaving recklessly face a spell in jail.

The Bank of England is also publishing final rules on clawing back bonuses paid to bankers caught up in misconduct.

The measures are in response to public anger over having to bail out lenders such as Royal Bank of Scotland and Lloyds in the 2007-09 financial crisis, where few individual bankers were punished.

Parliament also wants to restrain big bonuses at a time when most people have had to tighten their belts and fresh scandals emerge in the banking sector, such as Lloyds' $370 million fine this week for rigging market benchmarks.

The BoE will launch a consultation on tougher oversight of the most senior bankers, as called for by a parliamentary commission on banking standards.

New powers are to be introduced to allow for the jailing of bankers for up to seven years for reckless misconduct. 

Senior bankers would have to prove to regulators they were not aware of or had challenged dubious behaviour at the time.

The Bank will publish the final version of rules it proposed in March on clawing back bonuses already claimed.
              
The Bank has proposed that bankers and their bosses would have to hand back a bonus up to six years after it had been received if there has been misconduct.
              
Six years was proposed as this was seen as the longest period possible under British contract law.