The PCBS, a group of MPs and peers which was formed last summer in the wake of the LIBOR fixing scandal, released Changing Banking for Good, with the message that British banking requires urgent and comprehensive change.
The report recommended a number of measures, including:
- that senior bankers should be assigned clear personal responsibilities, with the legal onus on them to show they have done all that is reasonably required
- recklessly disregarding these responsibilities should be made a criminal offence - including a possible prison sentence
- senior bankers - and anyone in a position to cause the bank serious harm, such as top traders - should adhere to a new set of banking standards set by regulators
- pay for bankers should be deferred for up to 10 years, with the ultimate payout linked to the long-term performance of the bank and of the employee's particular business area
- bankers' pay and pension rights should also be cancellable if a banker fails to act appropriately, or, for senior managers, if the bank has to be bailed out
- banks should be legally required to put financial safety of the institution ahead of shareholder interests
Andrew Tyrie, who chaired the commission, commented that while senior bankers had hidden "behind an accountability firewall", cuplability for the decline in standards also lies with governments and regulators.
The report was well-received by the Treasury, which said there were:
"...many recommendations in it which will help the government's plan to create a stronger and safer banking system".
"The Government publicly welcomes the commission's recommendations on increased personal responsibility especially at a senior level, increased professional judgement by regulators and better functioning markets.
"We will now get on with a swift response and will report before the summer recess."
