Banking Commission: Bankers should face threat of jail and loss of bonuses

Senior bankers should face jail and the loss of millions of pounds in bonuses if they are involved in a future banking collapse, according to a report by a cross-party group of MPs and peers.

The Government has been urged to introduce a new criminal offence for “senior persons” who run banks in a “reckless manner”, as well as much more stringent clawback rules that could see managers being stripped of several years’ worth of pay.

Andrew Tyrie MP, the chairman of the Commission on Banking Standards, warned that bankers had escaped “personal responsibility” for their actions, and said that drastic reforms were the only way to restore trust in banks.

“Where the standards of individuals, especially those in senior roles, have fallen short, clear lines of accountability and enforceable sanctions are needed,” Mr Tyrie said.

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Other groups were less impressed, with the New Economics Foundation (NEF) saying the report was a “gentle step rather than a great leap forward”.

“Holding senior bank officials to account is important for justice, but it is unlikely to cause a significant shift in the behaviour of our banks. At the height of the boom, most bankers were not deliberately engaging in wrong-doing, they simply suffered from group-think,” said Lydia Prieg at the NEF.

[link to www.telegraph.co.uk]