Photograph by Sean Whitton
Chancellor George Osborne has said that the government will support most of the recommendations produced by the Parliamentary Commission for Banking Standards.
One measure that is likely to be popular with the electorate is the creation of a new criminal offence of reckless misconduct by top bankers, with those found guilty facing a possible jail term. The burden of proof will also be on the top bankers to prove that they took all reasonable steps to avoid a bank breaking rules, with the time-limit on prosecutions being extended to more than the current three years.
Banker bonuses, another issue that is constantly raised by the press, will also be addressed, with deferment of up to 10 years, and could be repayable if the bank needed to be bailed out during that period.
However, the government will not toughen limits on bank risk-taking as proposed in the report, instead keeping to the level set out by the Bank for International Settlements in Basel. UK Financial Investments (UKFI), the government’s holding company for its investments in the Royal Bank of Scotland and Lloyds Banking group, will also not be abolished.
In order to implement these changes, Osborne has said that the government will amend the Banking Reform Bill, saying:
“Where legislative changes are required, we will amend the Banking Reform Bill, which is currently before Parliament”
