UK regulators plan to relax City bosses' accountability rules
Bank of England and FCA propose easing post-2008 senior managers rules, cutting annual fit-and-proper checks to top executives and saving firms about £2bn over 10 years.
The story in focus
The Bank of England and the Financial Conduct Authority have proposed relaxing post-2008 rules holding City bosses accountable for wrongdoing, according to The Guardian. The plans would cut annual fit-and-proper checks to the most senior executives, free about 140,000 managers from integrity checks and narrow misconduct reporting to serious cases, with estimated savings of about £2bn over 10 years.
- Annual fit-and-proper checks would apply only to the most senior executives, such as chief executives and chief financial officers.
- About 140,000 managers would be freed from having to demonstrate integrity and adherence to conduct rules.
- Firms would report only serious misconduct and final warnings or dismissals, not first warnings or minor issues.
What the regulators propose
The Bank of England and the Financial Conduct Authority have put forward plans to water down rules introduced in the aftermath of the 2008 financial crisis that were designed to make City bosses accountable for wrongdoing, The Guardian reports.
Under the proposals, only the most senior executives, such as chief executives and chief financial officers, would have to prove they are fit and proper each year and before taking new jobs. About 140,000 staff would no longer have to show they are operating with integrity and following regulators' conduct rules.
The senior managers regime was introduced in the mid-2010s in response to public anger over the crash. It originally covered banks and was later expanded to asset managers, hedge funds and other financial services firms.
Reporting and savings
The changes would also loosen reporting requirements for lower-level misconduct. Firms would no longer have to report first warnings or minor misconduct of limited relevance to regulators' targets, and would instead report serious misconduct, final warnings and dismissals. Initial cases would still have to be flagged to chief executives and chief financial officers.
The regulators said removing what they called unnecessary burdens would save businesses about £2bn over 10 years. Annual compliance costs for their reporting requirements would fall by £11.5m and £229m respectively.
The Bank of England and FCA said high standards of individual accountability and conduct would remain unchanged, including ensuring individuals are accountable for misconduct affecting society and employers. The proposals follow government pressure on regulators to make UK firms more competitive.
Would the proposals remove accountability for City executives?
The Bank of England and FCA said high standards of individual accountability and conduct would remain unchanged, including ensuring individuals are accountable for misconduct affecting society and their employers.
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