Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Feb 09, 2023

Banks demand deep changes to UK's accountability rules -sources

Banks demand deep changes to UK's accountability rules -sources

Banks are pushing the British government to relax core parts of post-financial crisis rules designed to hold bosses to account for misconduct on their watch, in order to make hiring easier, two industry sources told.

Britain's Conservative government has said it will rework the 7-year old Senior Managers and Certification Regime to help boost the City of London's global appeal after Brexit.

Financial firms are preparing a case for scrapping the FCA Register, which lists all approved finance workers, one of the sources said, ahead of a forthcoming consultation which City Minister Andrew Griffith has said is expected within weeks.

Banks also want the government to ditch a requirement to certify senior officials below the top ranks such as CEO and CFO as "fit and proper" to hold roles, this source said.

Some hires need vetting by the Financial Conduct Authority (FCA) and the Bank of England (BoE).

"It is the right time for government and regulators to review the regime," said Simon Hills, director of prudential regulation at bank lobby group UK Finance.

The demands, which have been flagged in informal exchanges in recent months, represent the cornerstone of the industry's likely formal feedback to the pending government consultation.

But while Griffith told lawmakers this month he had already heard about industry hiring delays and difficulties recruiting from overseas, he played down the chances of radical changes amid pressure from transparency groups.

"It has turned out to be quite weak, but that is not necessarily a reason to water it down," said Simon Youel of Positive Money, which campaigns for a fair financial system, noting enforcement action under the rules was rare.

And Kay Swinburne, vice chair of KPMG UK's financial services practice, said that it was unlikely 'fit and proper' certification would be ditched entirely.


'LESS BUREAUCRATIC'


Regularly updating the FCA Register means significant administration costs, Hills said, adding members were still supportive of the regime's overall purpose and would await the consultation to make their case in full.

A third source at a global bank said reforms should focus on making the regime less bureaucratic, including the hiring process for certified employees, but added they were strongly in favour of a system that had been emulated overseas.

Bureaucratic hold-ups have led to delays of up to four months on authorising senior hires, a separate source said.

The proportion of approvals by the BoE within the 90-day statutory time limit dropped to 69% last year, down from 99% in 2019, data from bank lobby group TheCityUK collated from regulatory reports showed.

The proportion of on-time approvals by the FCA dropped to 86% from 99% over the same period, the data showed.

The FCA said it has made significant progress, reducing its pending case load by half. "We will meet our targets by March this year," it added.

The finance ministry referred to Griffith's comments in parliament. The BoE, which has had around 10 mostly ongoing SM&CR investigations, declined to comment.

Britain introduced the accountability rules in 2016 in response to public anger that so few individuals were punished over taxpayers having to bail out banks in the 2007-2008 financial crisis.

Regulators sought to reassure that the rules would not be used to put "heads on sticks" and discourage people from taking on senior roles. Head hunters say it is now only cited by those joining the banking sector from outside.

Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
Today's news from Britain - 9th February 2023
China has declined the US's request for Defense Secretary Lloyd Austin to speak with Chinese Defense Minister Wei Fenghe after the US Air Force shot down a suspected Chinese spy balloon, according to the Pentagon
The five largest oil companies in the West generated combined profits of nearly $200 billion in 2022, which has led to increased calls for governments to impose tougher windfall taxes
2 earthquakes in Turkey killed over 2,300 people
Powerful Earthquake Strikes Turkey and Syria, Killing More Than 1,300 People.
Turkish photographer Ugur Gallenkus portrays two different worlds within a single image. Brilliant work
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
Hong Kong airlines taking bold action after the years of pandemic lockdown and travel restrictions, to make Hong Kong great again
EU found a way to use frozen Russian funds
First generation unopened iPhone set to fetch more than $50,000 at auction.
WARNING GRAPHIC CONTENT - US Memphis Police murdering innocent Tyre Nichols
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
Chinese search giant Baidu to launch ChatGPT like AI chatbot.
What is ChatGPT?
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
China is opening up for foreign investors.
Tesla reported record profits and record revenues for 2022
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
China's foreign ministry branch in Hong Kong urges British gov't to stop the biased and double standards Hong Kong report
China relaxes 'red lines' on property sector borrowing in policy pivot
Tesla slashes prices globally by as much as 20 percent
Japan prosecutors indict man for ex-PM Shinzo Abe murder
Vietnam removes two deputy PMs amid anti-corruption campaign
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
China’s recovery could add 1% to Australia’s GDP: JPMorgan 
Saudi Arabia set to overtake India as fastest-growing major economy this year 
China vows to strengthen financial support for enterprises: official
International medical experts speak out against COVID-19 restrictions on China
2 Billion People To Travel In China's "Great Migration" Over Next 40 Days
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
Flight constraints expected to weigh on China travel rebound
Billionaire Jack Ma relinquishes control of Ant Group
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
Teslas now over 40% cheaper in China than US
TikTok CEO Plans to Meet European Union Regulators
UK chaos: Hong Kong emigrants duped by false prospectus
China seeks course correction in US ties but will fight ‘all forms of hegemony’, top diplomat Wang Yi says
China will boost spending in 2023
African traders welcome end of China’s Covid travel curbs
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
×